Tony Elumelu, the Chairman of Transnational Corporation (Transcorp) and United Bank for Africa (UBA), has emphasized the urgent need for the federal government to overhaul the power sector and privatize transmission lines to kickstart the nation’s economy.
Speaking in an interview with Bloomberg, Elumelu highlighted the challenges hindering growth in the power industry, citing insufficient transmission lines and liquidity issues in the electricity market.
He underscored the crucial role of adequate electricity supply in driving productivity, lamenting that Nigeria’s economy is suffering due to poor electricity infrastructure despite abundant natural resources. Elumelu stated, “The currency crisis is a sign of many things. As a country, we can’t produce well enough in spite of our natural resources. The reason is lack of electricity.”
Nigeria currently transmits less than a third of the 13,000 megawatts of electricity it generates to the grid, leaving the majority of Nigerians reliant on personal generators for power.
Elumelu proposed that the solution lies in attracting investors to develop the nation’s vast gas reserves to fuel power stations, while also advocating for the privatization of transmission lines. He emphasized the need for private sector involvement in managing transmission infrastructure to ensure efficiency and effectiveness in power distribution.
While acknowledging the government’s previous efforts to privatize some state-owned generators in 2013, Elumelu pointed out that insufficient investment in transmission assets has led to their inefficiency in delivering power to consumers. He stressed the importance of addressing this issue by privatizing transmission lines, allowing capable investors to modernize and optimize the grid infrastructure.
Elumelu urged the government to facilitate partnerships with investors to leverage Nigeria’s abundant gas resources for power generation. He suggested that the government should allocate idle gas assets or fields to investors with the capability and resources to develop them, thereby enhancing the country’s energy capacity.
In conclusion, Elumelu emphasized the imperative for comprehensive reforms in the power sector, including privatization of transmission lines and leveraging gas reserves for electricity generation, to stimulate economic growth and improve living standards in Nigeria.