FG targets $50bn investment in power
ABUJA—Minister of Power, Professor Bart Nnaji, yesterday, in Abuja, said about $50 billion worth of investment is needed from investors to reactivate the power sector.
He also said the Federal Government will provide subsidy on electricity tariff to avoid shock in the system, adding that the country has the greatest loss in Gross Domestic Product (GDP), due to power cut.
Also, Director-General of Securities and Exchange Commission (SEC), Ms. Arunma Oteh, expressed dismay at the low patronage of Nigerians in the capital market activity, saying, “Only about five million Nigerians out of a population of 150 million people invest in the capital market. Of this total, only 230,000 people representing 0.15 per cent of the total population, invest in Collective Investment Schemes (CIS).”
Speaking at a briefing to commemorate the 50th year regulation of the Nigerian capital market by SEC, Nnaji disclosed government’s determination to solving the power problem as a key infrastructure that will help in transforming the manufacturing and other sectors of the economy.
He commended the commission in its quest at encouraging investment in power and other sectors of the economy.
Nnaji said: “Nigeria has moved from 2,500 mega watts to N4,000 mega watts. This is nothing to celebrate when we compare this with what is generated in South Africa, Brazil , China , USA, and other developed countries.”
In her opening remark, the SEC DG noted that the commission had undertaken a review of its internal structures to improve efficiency and service delivery.
She said: “We have committed resources to enhancing and processes through fortification of our ICT platform in the areas of Registration, Returns Rendition and Analytics.”
She noted that there are great opportunity for growth in the CIS for both investors and managers of such funds, saying, “The Commission has intensified efforts to strengthen the market including examination of fund managers and trustees of such schemes and recently encouraged the establishment of an industry trade group for the fund manager.”
In his own speech at the event, Governor of Central Bank of Nigeria (CBN), Mallam Lamido Sanusi, who was represented by Mr. Tunde Lemo, Deputy Governor of CBN, said, “ When you look at Nigerian capital market, investors concentrated most on the equity market. The capital market has two arms. The equity market and the fixed income market. So whatever it is that we have done to intervene in the market is not to hurt both markets.
I know that in the short run it has negative impact on the equity market but here is the reason. We took the action for 3 reasons. First, because of the high volume of liquidity we have in the system so we have to tighten otherwise. We will have a problem with price stability and forex stability too if we fail to do so. We must take that action if we will have equilibrium that guaranty stable pricing.
Again, it was also to encourage savings mobilization. The Minister has said it, it is very important. We cannot mobilise savings if people earn below inflation rate, you will continue to impoverish sellers. It is not to the advantage of investors so we have to increase the interest rate to maintain equilibrium.”
But the thing is that President Goodluck Jonathan has set up a road map towards building the power sector as contained in its transformation programme. In fact, what contributed mostly in the power failure was because of lack of maintenance in our plants, under investment in power, no clear vision, amongst others.”
He stated further that Nigerians must have ability to pay for power supply as government will reduce its stake in the sector, while providing enabling environment for business to strive.
“ The generation, and distribution of power are going to be privatized so people should be ready to pay even though government will provide subsidy in the interim. In that way, the investors who will invest in the distribution and transmission of power can be able to pay for the power they purchase.
“The federal government will reduce its investment in the power sector especially in power generation but increase in transmission in the interim. We will encourage the state government and private sector to participate in the power sector. Any person can develop power plant, so it will no longer be federal government monopoly. We are going to increase power supply in some key economic areas of the country so that within a short period there will be a significant improvement to be able to enhance production activity” he disclosed.
In his own speech at the event, Governor of Central Bank of Nigeria (CBN), Mallam Lamido Sanusi, who was represented by Mr. Tunde Lemo, Deputy Governor of CBN, said, “ When you look at Nigerian capital market, investors concentrated most on the equity market. The capital market has two arms. The equity market and the fixed income market. So whatever it is that we have done to intervene in the market is not to hurt both markets.
I know that in the short run it has negative impact on the equity market but here is the reason. We took the action for 3 reasons. First, because of the high volume of liquidity we have in the system so we have to tighten otherwise. We will have a problem with price stability and forex stability too if we fail to do so. We must take that action if we will have equilibrium that guaranty stable pricing.
Again, it was also to encourage savings mobilization. The Minister has said it, it is very important. We cannot mobilise savings if people earn below inflation rate, you will continue to impoverish sellers. It is not to the advantage of investors so we have to increase the interest rate to maintain equilibrium.”
