Barring last minute changes, Nigeria’s debt profile will rise further by November 2016, as it has concluded plans to obtain a N13.5bn loan-facility from France for the power sector.
Already, statistics from the DMO say Nigeria’s international loan profile stood at $13.5 billion in September 2017.
Also, between 2014 to June 2016, when the PHCN was split into zonal unit offices and sold to private the sector, foreign and local loans to the sector are estimated to be above $1.45bn.
The bulk of the loans is said to have gone to the power generation companies (Gencos), with the Egbin power plant, one of the biggest and oldest, bearing about 35 per cent of the loans burden.
However, economists are divided on the need for the proposed loan, arguing that since the sector has been privatised, operators should be allowed to run it like is the case with the telecoms sector.
Dr. Solomon Ezomon, a senior lecturer at the Lagos State University said there is no economy that survives without taking credits that come with good terms.
“If half of the total loans that Nigeria owes were used to fix the power sector, other sectors of the economy would have been better for it,” he told Ripples Nigeria in a chat on Saturday.
An aide to the Minister of Power, Works and Housing, Babatunde Fashola, denied that government is reluctant to totally hands off the power sector with its unwillingness to privatise the transmitting sub-sector.
On the huge loans already within the sector, he said government was still in full control of the situation.
“As private firms, there is a limit to which government can interfere without being accused of being too involving,” he stated.
But the Ambassador of France to Nigeria, Mr. Denys Gauer, said that the French Development Agency had already accepted to grant the said loan, which he described as “a soft loan to support the development of Nigeria’s power sector.”
He said France was committed to supporting Nigeria develop its renewable energy, as ECOWAS countries are expected to achieve a rise from 28 to 48 percent within 2017.
“We have worked very closely with the Nigeria authorities; we have helped Nigeria participate in several multilateral initiatives on renewable initiatives,” said the envoy.
By Emma Eke….
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