Chairman of United Bank for Africa (UBA), Tony Elumelu, has urged the Nigerian government to privatise state-owned transmission lines to boost the nation’s electricity supply and foster economic growth.
Elumelu stated this in an interview with Bloomberg on Wednesday, saying that revamping the electricity sector is essential to reviving the struggling economy.
He stated that insufficient transmission lines and a lack of liquidity in the electricity market are impeding the industry’s expansion.
Elumelu said, “Even where you generate electricity, the grid cannot take it, so it’s a problem for us. Some institutions have idle gas assets or fields. The government should take some of these and let Nigerians who have the resources and means to invest in gas take them”.
“I am advocating that let us privatize transmission lines,” he added.
The Heirs Holdings chairman said insufficient transmission lines and lack of liquidity in the electricity market are hampering growth in the industry. The power deficit in turn is stymieing the economy and weighing on the nation’s currency, which has plunged 70% since June.
The currency crisis “is a sign of many things,” Elumelu, 60, said in an interview. “As a country, we can’t produce well enough inspite of our natural resources. The reason is lack of electricity.”
Nigeria sends less than a third of the 13,000 megawatt of electricity it generates to the grid, leaving the nation’s 200 million people dependent on home generators.
A solution, according to Elumelu, is for President Bola Tinubu’s government to lure investors to develop the nation’s large gas reserves to fuel power stations, and allow the private sector to manage the transmission lines.
Nigeria in 2013 sold about 15 state-owned generators to private companies to improve efficiency while keeping ownership of the transmission lines. But the lack of investment in the transmission assets meant that they are too weak and inefficient to wheel power to consumers.
Nigeria produces about 70% of its power from gas-fueled stations but generators often complain of lack of the fuel.
