We must prioritise the power sector in Nigeria – Elumelu

Chairman of Transcorp and United Bank for Africa (UBA), Tony Elumelu has said it is only a matter of time before the power sector collapses.

Elumelu said this in a recent interview with CNBC Africa.

“The agency of government that has responsibiity for making sure that this sector delivers on its potential is not doing well enough. We are owed a lot of money.”

“Transcorp Power Holdings is owed almost N50 billion. When we put in the invoice for this month, we should be owed almost N54 or N55 billion. How do you survive in business like this? How? Other GenCos I know are actually dying.

“We are struggling because of our diversified resource base, what of others? Something urgent and drastic must be done. It is as urgent as yesterday.

“The truth is Transcorp power, as a key operator in the sector, is struggling. And if we are struggling, you can imagine what others are going through.”

He said the value of debt owed by the government has depleted owing to the increase in price of the dollar.

According to him, the government started owing when dollar sold for N168 and now it sells for almost N500.

“Now you put in an invoice and you get paid 15-20%. And they started owing us when the naira was N168 to the dollar now it’s N300 officially and  N500 on the black market to the dollar so imagine what that’s doing to investors of transcorp. Is that going to encourage more investment in the sector? How?”

Elumelu urged the government to prioritize the power sector to ensure it does not collapse.

“When we went to the invest in the power sector, price of the tariff was predicated on 3 factors, exchange rate, gas and the rate of inflation.

“The rate of inflation has moved from single digits to double digits. The dollar is now worth over N300, and there are problems with gas supply.

“Today all three factors have changed but they are still paying us the same. ”

“We need to prioritise the power sector in Nigeria,” he added.

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