The Lagos Chamber of Commerce and Industry has charged the Federal Government to address the liquidity crisis and tariff issues in the power sector in order to enhance investment that would enable the country meet the target of generating 25,000 megawatts of electricity by 2025.
At a meeting with the Siemens’s Global Chief Executive Officer, Joe Kaeser, in July, the Federal Government had entered a pact with the German company that would enable the country to achieve the target.
The deal, however, did not excite some operators in the sector as they wondered why the Federal Government failed to consult widely before entering into the agreement with Siemens.
They complained of the liquidity crisis in the sector as well as the indebtedness to power generation companies alone by the electricity market which was about N1tn.
Speaking on the Siemens deal, the LCCI said it was important for the government to address tariff issues and liquidity concerns in the sector in order to attract higher interest in the sector.
The chamber’s Director-General, Muda Yusuf, told our correspondent that although the deal was welcomed, the right things must be done to make it work.
He said, “We need to address the issues of tariff and liquidity in the electricity market to enhance the economics of investment in the power sector.”
He noted that power crisis in Nigeria had limited private sector investments across the country, which was why the government’s pact with Siemens would go a long way in transforming the economy if it succeeds.
Yusuf said, “The recent Federal Government pact with Siemens in the power sector is a welcome development. If there is any impediment to private sector development in the Nigerian economy today, it is the issue of power.
“However, it will be nice for such a pact to be more ambitious in the light of the huge deficit in the power sector. This pact aims to produce 25,000MW of electricity by 2025.”
He added, “Meanwhile, it is important to have a more holistic approach to the issue of power. There should be greater emphasis on off grid solutions in order to ensure the decentralisation of the power sector.”
The LCCI boss said the current model of high dependence on the national grid had not worked well to serve the economy, adding that it was also important to ensure the rapid promotion of renewable energy solutions through the enactment of policies that would make them more affordable.