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Government Debt Is A huge Problem for Electricity Distributors
As at January 2017, federal ministries, department and agencies, including the military and police, are owing electricity distributions companies (DISCOs) more than 100billion naira, an expert has said.
Speaking to Inspiration FM recently, Barrister Fred Nzeakor, a lawyer and development economist, said government debt had become a tremendous burden on the DISCOS. He added that, for the companies to adequately perform their functions, all arms of government, and all energy consumers, must pay their bills.
Besides, he noted, Nigeria’s development would always be tied to energy security, which can only happen with considerable investment in the sector.
“It behoves on government to ensure that development is catalysed by ensuring that energy is provided for Nigerians by giving all manner of encouragement to the distribution company so that whatever is generated and transmitted is adequately distributed, and payment received for such distribution.”
As for the 500billion naira shortfall which has accrued from the discrepancy between the tariff set by the Nigerian Energy Regulatory Commission (NERC) and the prevailing market costs, Nzakwu suggested that government should intervene so as to keep the distribution companies alive.
“Intervention is a natural thing in an economy and it is done all over the world,” he said. “We have seen interventions in the banking sector to save the depositors; we have seen interventions in the aviation sector to save the airlines; we have seen interventions in the education sector to save the institutions. We expect an intervention in the energy section which is the fulcrum of national development.
“Such intervetion will be welcome and we encourage government not to waste time on such interventions so that we’ll begin to move along the line of development with energy security assured.”
Speaking on the funding challenge in the sector, Minister of Power, Works, and Housing, Babatunde Fashola, said rather than cancel the privatisation as some critics suggested, it is better for the government to manage.
In a meeting with the editorial board of The Guardian last week (January 12), Fashola conceded that “there were some things that could have been done differently in the process of privatisation. [But] even if I might have done some things differently, it doesn’t remove the fact that I might as well have made some mistakes. My attitude has been, let us manage the flaws. We can correct them instead of cancelling the privatisation, because that will only set us back to the beginning.”
