FG injects fresh N701bn into power sector
Acting President Yemi Osinbajo said the Federal Government was infusing a massive payment assurance scheme of over N701 billion into the power value chain to free it up.
Osinbajo spoke at the Banquet Hall of the Aso Rock Presidential Villa in Abuja yesterday during a programme tagged “Nigerian Initiative for Economic Development”.
He said: “The power sector is almost completely privatized. But we have had difficulties because of tariffs, for example. Many times you look at our power sector, we have an installed capacity of about 12,000 megawatts today but we are only able to put on the grid under 5,000, a little above 4,000 megawatts. But we know that the potential is way beyond that maybe four or five times that.
“But what do we do to ensure that we realize that potential? What we need to do is to make this profitable for the private sector. So, we are working on the whole value chain. We are trying to free up that value chain, beginning with working on tariffs, and then, looking at the how, at the moment we have problem of liquidity in the value chain and we are addressing that. There is a massive payment assurance scheme of over N701 billion that we are infusing into the power value chain to free up that value chain. Once we are able to do that and we address the issue of tariffs we open it up again. And then people can come in and the big investors can come in and invest in power.
“This is a country of 180 million people and in another 10 years’ time we are probably going to be the sixth or seventh largest country in the world. There is no way we are not going to need power, whether it is offgrid power or on-grid power. Power is required by everyone where we have a major power deficit. So, we are going to open up that power sector and anyone who invests in power sector will definitely make money. No question. It is going to be much bigger and better than even the telecoms.”
The acting president declared that the 2017 federal budget of over N7 trillion is a small amount of money. He said: “Our budget is N7 trillion this year. Now, N7 trillion is a small amount of money. I am not adding the budget of the states because if you add that, it comes to something close to N20 trillion. But just looking at the federal budget, it is just N7 trillion.”
The National Assembly had on May 11 passed the 2017 Appropriations Bill, raising the budget from N7.28 trillion earlier proposed by President Muhammadu Buhari in December last year to N7.44 trillion.
Osinbajo noted that the current private sector investments challenged that size, saying “For example, the largest single line refinery in the world is a private sector investment and it’s going to be doing 650,000 barrels of oil every day. That refinery is purely private sector driven. Also, the largest single line fertilizer plant in the world is being set up here. All of these will be ready by the end of 2018, some early 2019. They are huge private sector investments that completely belie the size of the federal budget and belie everything else.”
He said the government intended to push the private sector “And that’s why we are doing everything that we are doing to ensure that the private sector can come in and invest.”
Osinbajo described Nigeria as “A place that is waiting to happen and it will happen. That’s really the point. It will happen. The truth of the matter is that any country that opens itself to free enterprise, the way Nigeria is opening itself to free enterprise, will somehow find that it will work.
“That is one of the critical things that we are bringing into the mix. We are insisting that the only way that this country can make the profit that it needs to make is by private sector investment, beginning with local investment. That’s why we are working so hard on making the investment climate profitable and easy for those who are doing business already, because we believe that those who are doing business already will invariably bring in those who want to do business from outside the country, foreign investment etcetera.”