Federal government may divest its stake in Electricity Distribution Companies and also persuade Disco owners to sell part of their stake to new investors. Indication to this effect emerged at the closing of the 2017 Nigerian Economic Summit in Abuja. Dropping the hint of plans by the government Minister of State for Budget and National Planning Mrs. Zainab Mohammed, said that the federal government has commenced negotiations with operators of the Electricity Distribution Companies (DisCos) with a view to ceding some of their shares to accommodate new investors who would bring in more funds to ensure better service delivery.
She said that Discos have been recognised as obstacles to the nation’s quest for efficient electricity sector. She said “the Power sector has been privatised and every Nigerian knows that the privatisation has not worked well. Things we sought to achieve in the power sector have not yet happened. And we have now come to the point where investors in the power sector must come together and decide to cede some of their holdings to enable new investors with expertise come in to enable us grow the power sector at the pace we want. It involves negotiating with existing owners and also government.
“No new investor will be interested to come in with the level of tariff obtainable now. There will be an impact on tariff. Starting point will be Discos. The power sector will be opened up to new investment, it is very clear that no new investor will be coming without having a satisfaction from the tariff that will be obtainable in the industry. That is a discussion that must be held. It is very clear to us now that the level of tariff we have now is not sustainable. It will be a subject of negotiation between government, the existing investors and new investors as well as consumers. We will try to attain to optimal level that will make an impact on the tariff. The starting point will be the Discos.”
The minister also said that the draft 2018 federal government budget was ready and would soon be forwarded to the Federal Executive Council and subsequently to the President who would present it the National Assembly. She added that the executive was working closely with the legislature and was optimistic that the Budget would be passed in December. If passed in December, it would enable the executive to commence its implementation as from January 2018 in its quest to return to budget circle from January –December of each year. She said, “The budget 2018 will be presented to NASS in October. We are on course and on target to achieve that. It is ready and will be going to FEC for approval before President presents it to NASS
“Working with NASS, we hope the budget will be passed on time in December so that by January, we start with a fresh budget.”
Mrs. Mohammed also justified the decision of the federal government to focus more on taking foreign loans, as according to her, it was to avoid crowding out the private sector. She said that the on-going reform in terms Ease of Doing would change some of the narratives at the nation’s ports and public institutions mandated to facilitate business in the country.
According to her, the Single-Window initiative of the federal government would fast-track clearance of goods at ports as the Nigeria Customs Service was already working to import machines that could scan containers without having to be opened physically. The minister also said that the major reconstruction of the access road to Apapa Port would make the current gridlock a thing of the past, when completed. She appealed to the National Assembly to expedite action on the passage of the Petroleum Industry Bill as its delay has continued to hold back investments into the sector.
