Nigerian business magnate and philanthropist, Tony Elumelu, has called on the federal government to privatize the transmission lines in a bid to enhance electricity supply and stimulate economic growth in the country. In an interview with Bloomberg on Wednesday, Elumelu emphasized the importance of revamping the electricity sector as a critical step towards revitalizing Nigeria’s economy, urging the government to take decisive action to address existing challenges.
Elumelu highlighted the significant hindrances to the growth of the electricity industry, citing inadequate transmission lines and a scarcity of liquidity in the electricity market as major obstacles. He stressed that even with increased electricity generation, the existing grid infrastructure is incapable of efficiently distributing power, posing a significant challenge to the sector.
Addressing the issue of idle gas assets, Elumelu proposed that the government should leverage the resources and expertise of Nigerian investors to optimize gas utilization for power generation. He advocated for the privatization of transmission lines as a strategic move to attract investment and promote efficiency in the sector.
“Even where you generate electricity, the grid cannot take it, so it’s a problem for us. Some institutions have idle gas assets or fields. Government should take some of these and let Nigerians who have the resources and means to invest in gas take them. I am advocating that let us privatize transmission lines,” Elumelu stated.
Elumelu emphasized the need for President Bola Tinubu’s administration to facilitate a conducive environment for private sector participation in the development of the nation’s vast gas reserves. He underscored the importance of attracting investors to oversee transmission infrastructure and drive improvements in electricity distribution.
The call for the privatization of transmission lines comes against the backdrop of Nigeria’s efforts to address the challenges facing its electricity sector. In 2013, the country privatized approximately 15 state-owned power generators, transferring them to private entities to enhance efficiency. However, despite these reforms, inadequate investment in transmission assets has persisted, resulting in inefficiencies in power distribution.
Nigeria continues to grapple with poor electricity supply, which has had adverse effects on businesses and industries across the country. The reliance on diesel-fueled generators has become commonplace, leading to increased operational costs and reduced productivity. Factors contributing to the inadequacy in power supply include low generation capacity, insufficient gas supply, and infrastructural challenges within the distribution network.
Earlier this year, the Minister of Power, Adebayo Adelabu, threatened to revoke the licenses of underperforming distribution companies in a bid to address the persistent issues affecting electricity supply. Elumelu’s advocacy for the privatization of transmission lines aligns with ongoing efforts to improve the efficiency and reliability of Nigeria’s electricity infrastructure.
As a prominent figure in Nigeria’s energy sector, Elumelu’s firms control a significant portion of the nation’s electricity generating market. His recent appointment as one of the economic advisers to President Bola Tinubu underscores his influence and expertise in driving policy reforms aimed at promoting economic development.
In a strategic move to further enhance liquidity in the electricity sector, Elumelu’s power firm, Transcorp Power Ltd., recently listed on the Nigeria Stock Exchange at a valuation of $1.2 billion. This initiative is expected to attract investment and support the expansion of power generation capacity, contributing to efforts to address Nigeria’s energy challenges and foster sustainable economic growth.
