Business Hilights
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Planned N871bn injection into power sector may rest need for tariff hike

Strong indications emerged Wednesday that the Federal Government is planning to inject N871 billion into the power sector early next year to cut off highly speculated tariff review.

This is coming from details of the newly approved 2018 to 2020 medium term expenditure framework and fiscal strategy paper.

However, industry observers are skeptical that the planned injection may resolve the challenges faced by the power sector without any need for tariff review.

Before now, a serious tariff hike campaign led by Power Generation Companies (Gencos) and Distribution Companies (Discos) has continued to pitch Nigerians and mostly manufacturers against the power sector investors.

Trouble to this development had started since Gencos began to plot rise in tariff against the established timetable for reviews. Whereas the power companies had wished for monthly reviews, manufacturers and ordinary power users insisted that provisions of the Act must be adhered to which is annual reviews.

This dilemma had therefore forced Discos to reject high load especially when the loads are pushed to areas of low power demand in other to avoid undue cost payment to both Gencos and Transmission Company of Nigeria (TCN).

Majority of Nigerian leading industrialists and banking experts had called for outright cancelation of the privatization power sector based on the abysmal performances of the firms since the privaisation by previous regime, but government had continued to be cautious in the matter.

The latest call came from the chairman of United Bank for Africa (UBA), Mr. Tony Elumelu who argued that time has come to review the performances of the power investors’ so as to return the sector to the needed level of performance.