Adebayo Adelabu, Nigeria’s Minister of Power has warned that the federal government requires $10 billion annual investment in the power sector to stop it from collapse.
The minister made this known in Abuja, the nation’s capital at a one-day investigative hearing by the Senate committee on power.
The hearing was called by the Senate after Nigerians complained of the recent increase of electricity tariff in the country by the Nigerian Electricity Regulatory Commission, NERC.
The commission had recently increased the tariff by over 200 percent amidst serious complaints from many Nigerians that the action will further worsen their suffering, apart from the fact that businesses will be crippled as a result of it.
Amidst the tariff hike, not a few Nigerians insist that Adelabu should concentrate on fixing the problem of erratic power supply in the country, which has affected businesses and households who depend on electricity.
But speaking yesterday, Adelabu said the recent increase was borne out of making capital available for power operators in the country, saying more capital investment was required to turn the sector around.
If $10 billion is not invested yearly in the sector, it faced imminent collapsed, the minister said during the interaction with the Senate Committee led by Eyinaya Abaribe.
He explained that the investment was needed to attract investors to the sector, adding that the government cannot continue to pay subsidy which serves as disincentive to prospective investors.
Adelabu said, “For this sector to be revived, government need to spend nothing less than 10 billion dollars annually in the next 10 years.
”This is because of the Infrastructure requirement for the stability of the sector, but government can not afford that.
“And so we must make this sector attractive to investors and to lenders.
“So for us to attract investors and investment, we must make the sector attractive, and the only way it can be made attractive is that there must be commercial pricing,” he said.
“If the value is still at N66 and government is not paying subsidy, the investors will not come.
“But now that we have increased tariff for a Band, interest has been shown by investors.”
