Despite privatising the power sector, the Federal Government has spent over N1.7tn on the sector in the last three years, an interim report submitted to the National Economic Council indicated on Thursday.
The Governor of Kaduna State, Nasir el-Rufai, chairs a Committee of NEC mandated to investigate the ownership structure of power distribution companies in the country.
The governor had briefed an expanded session of NEC comprising state governors, ministers and other stakeholders on the preliminary findings of the committee.
He said after meeting for five times, the committee found that the problems of the power sector were enormous and required declaring a “national emergency” to find solutions.
Speaking with State House correspondents after the meeting, which was presided over by Vice-President Yemi Osinbajo, the governor said in the last three years alone, N1.7tn of public funds had been pumped into a privatised sector.
“That is certainly not privatisation,” he stated.
According to him, the various stakeholders the committee met with admitted that there were problems because Nigerians had really not enjoyed improved power supply.
He said, “The full report will be ready soon, hopefully in February. The power sector is complicated and requires enormous time to really go to the root of the problems.”
“Nigeria will go nowhere unless we have stable power. Right now, we shall invite members of the general public to also give their views by sending in memoranda to the committee. The owners of the power companies too, we will get their views. The objective is: how do we fix the power sector?”
El-Rufai said the committee informed NEC that the problems ranged from lack of capacity, tariff issues to poor funding.
He added, “The problems in electricity are many, capacity is one, perhaps. There are some that have shown lack of capacity; it is true but there are many that are fantastic. So, it is very difficult to pass a quick judgment.”
“There are other issues. The entire sector is broken. The tariff is an issue. The way the privatisation was done is an issue too many.”
“What we have agreed on is that there are fundamental problems in the electricity supply industry. You cannot privatise an industry and then over three years since privatisation, you pump in N1.7tn of government into it. That is not privatisation.”
“So, solutions must be found; those solutions are not going to be nice. They may be painful but the only way to solve the structural problems in the industry. It is to take some very difficult decisions.”
The governor also said NEC gave a nod to the proposal to pull N2tn from the pensions fund for investment in infrastructure development.
He explained that the money would be set aside to be accessed by the private sector to invest in road and rail infrastructure on a long-term basis.
However, he said all the legal requirements would first be worked out before the money would be pulled out in line with the 20 per cent ceiling approved by the Pension Reform Act for investment.
“We have N10tn in the contributory pension fund today, and it keeps growing because more young people are coming into the workforce”, he added.
Meanwhile, the Minister of State, Budget, Mr Clement Agba, gave an update to NEC on the balances in the Excess Crude Account; Stabilisation Account; and the Natural Resource Fund for Development.
Agba said as of January 21, the balance in the ECA was $321.3m, while the stabilisation account had N21.8bn.
For the natural resources account, the minister said the balance stood at N96.9bn.