A Benefit from Petroleum Subsidy Withdrawal and Forex Rate Unification Policy to Nigeria – TDF
By TDF
The Democratic Front once again commend the President and Commander-In- Chief of the Armed Forces of the Federal Republic of Nigeria, President Bola Ahmed Tinubu, GCFR, for achieving yet another milestone in the efficient use of savings from the petroleum subsidy withdrawal.
The payment of the accumulated power sector debt by the president is a step in the right direction.
It will reinvigorate the sector by aiding the electricity generation companies with the ability to meet all their financial obligations and also boost their capacity to generate adequate electricity supply for the country.
Prior to the coming onboard of the Tinubu administration, the power sector in Nigeria was bedevilled with multi-dimensional challenges ranging from dilapidated infrastructure, low productivity, maladministration and corruption to criminal acts of electricity theft and brazen vandalism.
These negative trends in the power sector, grossly impeded the country’s ability to generate and distribute maximum power requirements for the stimulation of employment creation, development of domestic industrial base, as well for encouragement of economic growth and prosperity.
The negative effect of all these have been decades of dismally low Gross Domestic Product (GDP).
We, however, acknowledge with great pleasure the commitment and passion with which the President Bola Tinubu administration have approached the formidable challenges in Nigeria’s power sector since its inception.
The decentralization of the spatial slot for electricity distribution to accommodate smaller investors in the sector, and the devolution of electricity regulatory powers to allow for the establishment of state regulatory agencies that will oversight the activities of electricity investors at both State and Local government levels, are landmark decisions that will revolutionize the power sector for optimum performance and efficiency.
The three months ultimatum for core electricity investors to acquire the heavily indebted electricity distribution companies (DISCOS), issued recently by the government is, in our opinion, the best solution to the failure and incompetence of the DISCOS, which have held the nation to ransom since 2013..
The payment of 3.3 trillion Naira to clear the arrears of debt owed by the GENCOS is a confirmation of President Tinubu’s determination to revitalize the problematic power sector through massive capital investments, despite the multiple challenges confronting the economy.
For many years, the electricity generation companies have operated with financial difficulties in procuring gas for energy generation under successive administrations.
The poor supply of gas to the GENCOS has ensured that Nigerians continue to live under the agony of perpetual power outages that have paralyzed social and economic lives and businesses in the country.
This timely intervention by President Bola Ahmed Tinubu in the power sector could not have been possible without the contribution of the twin policies that drive his administration’s economic reforms.
That is, withdrawal of petroleum subsidy and the unification of foreign exchange rate policy. This reality underscores the need for Nigerians to continue to embrace and support the reform policies of the federal government.
We are optimistic that the payment of the power sector debt by the President will disentangle the GENCOS from the indebtedness that have deprived them of access to gas supply for many years. For this singular reason, TDF expects a significant improvement in their optimum production and services to the nation going forward.
We laud the efforts of President Bola Ahmed Tinubu in proffering viable solutions to the age long problems of the Nigerian power sector.
TDF is very confident that the President has approached the power sector challenges from a solid perspective that is devoid of rhetoric but anchored on effective policy deployment.
The presidential approval for the payment of 3.3 trillion naira debt in the power sector is a giant leap in the history of electricity provision in Nigeria. We hereby encourage Mr. President to sustain the current tempo for capital investment in the sector so that his target of 20,000 megawatts of electricity in Nigeria can be achieved.
