Elumelu, UBA chief seeks review of power sector privatisation

Founder of Heirs Holdings, Tony Elumelu, has urged the Nigeria government to take a second look at the privatisation of the power distributions company and review its ownership by the present crops of incompetent private sector operator.
Elumelu, who is also the chairman of the United Bank for Africa (UBA) said the government should begin to think of selling the firms to new investors who are capable of successfully running them and have proven record of competence.
He said the present arrangement allows the electricity distribution companies to hold the nation down with inefficient power distribution.
Elumelu, who spoke at the ongoing 23rd Nigerian Economic Summit (NES) in Abuja. suggested that the Federal Government to increase its stake from the current 49 percent and sell the controlling shares in each of the Discos to new investors.
“Our people are very enterprising and they want to succeed. But they need the right environment to succeed. I appreciate what the government is doing for electricity, but we need to do more," he noted.
“I empathise with the government on its efforts in that sector. But Mr. Vice President, I think there is a lot we can do to correct the ownership of that sector without affecting the propriety rights of the investors. That sector must be dealt with for us to have sufficient power to do business.”
The government had in recent time provided around 700 billion naira support for the power sector, however, Elumelu believed that such support will soon be frittered away without a commensurate improvement in power supply.
“The market should be able to sustain itself. This is what I think. The government has to take actions that will ensure the adequate funding of the operations of the Discos," He further stated.
He suggested that the government should recapitalise the distribution companies and increase its stake in them as part of reform to improve competence and reduce the influence of the present crops of incompetent owners.
He said after the government must have recapitalised the companies, it should sell its controlling shares to new investors who have the financial wherewithal to properly finance the operations of the companies.
"This is important because, in a situation where the current operators don’t have the funds to run them if the Federal Government wants to sell its shares in the Discos, investors who should have brought in their capital won’t come in if the controlling shares continue to remain with the current operators."
“Mr. VP, I know some of the operators in this sector will not like this. This is my idea. We cannot reverse what has been done, but we can creatively address what has been done.
“When this is done, then we can have new investors who can come in and run the Discos efficiently. It doesn’t matter where they come from, but they should be investors who have the financial capacity and tested expertise to manage the distribution segment of the sector in such a way that they can deliver effective services.”