In what appears a major point of departure, Africa’s richest man and founder of the Dangote group, Mr. Aliko Dangote and the Nigeria Bureau of Public Enterprise (BPE) have taken different stands on the privatisation of the country’s power sector.
Dangote faulted the privatization process, explaining that it was wrongly done, even as he called for a reversal of the entire process.
He made his views known, while speaking as a guest lecturer at the Senior Executive course 38 of the National Institute of Policy and Strategic Studies (NIPSS), Kuru, in Plateau State.
He lamented that despite the privatisation of the sector, the problems persist mainly because the buyers lack an understanding of the complexities of the sector.
However, the BPE which is the agency that handled the power sector privatisation in 2013, did not agree with him, instead arguing that it was too early to write off the entire process as having failed.
Acting Director General of the BPE, Dr. Vincent Akpotaire responded to Dangote’s call while speaking at the roll out of large power users’ (LPU) meters which the Abuja Electricity Distribution Company (AEDC) procured for deployment to maximum demand customers.
According to him, Dangote was hasty in making the call for the reversal of the powere sector Privatisation, noting, that the agreement signed with the investors upon acquisition of the power assets gave them as at least five years to invest and stabilise their networks.
He also called on the business mogul to evaluate statements before making them, as his claim of the exercise being a failure is not factual.
“My take is that we need to evaluate statements before we make them. That is the point I think we should put across to Nigerians”he stated.
But Dangote expressed fears that because of lack of understanding of the sector, the generating and distribution companies which took over the power assets are now holding the country to ransom.
He further noted that the country may never be able to deliver adequate power for use except government quickly decides on taking back the assets and giving them to people who have the capacity to inject money, and run the sector effectively.
He said: “People who wanted to buy all these plants, both the generating and distribution companies, thought that this was another opportunity like mobile phones, where we have moved from 500,000 lines in 2000 and in ten years we now have 120million lines.
“Yes it would have been so but these guys, what they did when they bought these power plants was that they borrowed 90 per cent of the money in foreign currency. You cannot go and borrow dollars when your base income is in naira, you will have an issue because your earnings are in naira you are taking a huge exchange risk and that is what happened today.
“The majority of them went in without even understanding what they are doing and the worst thing for any entrepreneur is to go into a business without understanding it.”
“If you don’t understand a business no matter how much money they show you that you are going to make, how much profit, don’t go into where somebody has to come and sit you down and start explaining because if he is doing something wrong, you don’t have any way of challenging him.
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“If you wake me up in the middle of the night on any of the businesses we are doing today, even the new ones I will be able to explain it to you, I know my entry and I know my exit but unfortunately that is what these guys did and today they are holding the entire nation to ransom, it is very embarrassing for us.”
“My own advice is that government should sit down with them and negotiate the best way out because we need power, we are desperate for power and if there is no power no growth because if you look at the medium and small industries, most of their income goes into buying diesel or petrol to generate power and that shouldn’t be the case”, he stated.
But in defence, Akpotaire said, “We have put only about three years since the handover of the power sector to private investors.
“Before that, the power sector had existed for well over 50 years and in those 50 years, hardly much was achieved due to several factors and the decision to privatise was a well thought-out decision”.
He further stated: “In three years, the measurement of their performance is based on a five year index which is under their agreements and that measurement is not dependent only on the activities of the private investors alone but also on the tariff structure.
“You are all aware of controversies the tariff has thrown up and because of that, there is now a scale back in reviewing of the tariffs, one segment of the review has just been lost and for every review not done, there is a gap in the funding.
“As of today we are just starting the issues and I am confident that in the next few years, most of the results as to performance will be better checked.”
He continued, “What I expect is solution finding and not reversal of the privatisation. Best practices demands that this is the way to go. Even in countries as small as neighbouring Ghana, they have made attempt to privatise different sectors of their power sector.
“The concept is not the problem but the management of the outcome. We need our leaders to speak to the solution and not the problems,” he noted.
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