More pressure groups and professional bodies have continued to stand against the ongoing Federal Government’s move to borrow $3billion World Bank loan to finance the power sector.
Experts who are opposed to the borrowing spree of the current administration raised alarm saying the move is coming at a time that Nigeria’s external debt had risen to N25.7trillion.
In its reaction, the Association for Public Policy Analysis (APPA) is of the view that more explanations are still awaited on the results of the over N1.2trillion sunk into power sector projects between 2015 and 2019, which it said had remained intangible.
Giving further insights in an interview, the National President of APPA, Princewill Okorie, recalled that between 2017 and 2018, the Federal Government collected a $1billion performance-based loan from the World Bank to fix the power under the Power Sector Recovery Programme (PSRP).
Okorie averred that “In our opinion, rather than collect loans, which increase Nigeria’s debt profile and eat up large chunk of the Federal budget in debt servicing like the 2020 budget proposal that has appropriated the sum of N2.45 trillion for debt servicing, efforts should be made to encourage the independent electricity distribution networks to function optionally.
“The advantage in this is that Federal or State government will not borrow to fund them in generation (GENCOs), transmission (TCN), and distribution (DISCO). In fact, through willing-buyer and willing-seller model, they will operate in a peaceful, and transparent way with the consumers without the corrupt practices of estimated billing methodology, disconnection without notice, collection of illegal reconnection fees, failure to repair faults contrary to customer service standard of performance for distribution companies,” he said.
APPA chided the government for funding privatized company with taxpayers’ money rather than force Discos to scale up their infrastructure which the TCN had been complaining as the major hiccup to steady electricity.
APPA expressed concerns over donors and development agencies’ willingness to provide fund to government without getting consumer enumeration on impact of performance of the DISCOs, GENCOs and TCN on Nigerian consumers.
Okorie “As we speak, there is no publicly known data of the number of metered and unmetered consumers, and no information on the amount of money generated by DISCOS from consumers through estimated billing.
“World Bank and loan givers for Nigerian’s inefficient power, should, in understanding of privatisation, protection of consumers from abuses, and the need to create jobs, aim at encouraging power sector entrepreneurs through survey and mapping on the performing ones, fund consumer enumeration and education.”
“We strongly submit that debt servicing and ratio as percentage of the GDP may not be sustainable in the long run even though debt financing may be imperative for economic growth and development. The idea of PPP is an excellent mechanism to ensure effective and efficient utilisation of resources in the power sector.
“It is more important to look at debt ratio in terms of revenue earning of the country. Government has no business taking loan on behalf of the Discos. At best, the government may provide sovereign guaranty the Discos loan since they are private businesses,” APPA President noted.
