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Economy | Power & Energy

Proper Pricing and Metering will Attract Investments into Nigeria's Energy Sector

Apr 04, 2022   •   by   •   Source: Others   •   eye-icon 144 views

Monday, April 04, 2022 / 10:00 AM / by Ottoabasi Abasiekong for WebTV / Header Image Credit: WebTV 

With the removal of the electricity subsidy by the Federal Government, proper pricing and metering are part of the critical factors that will stabilize Nigeria's energy industry. 

Energy analyst Mr. Mukhtar Mohammed stressed this while assessing "Nigeria's Energy Sector and the Pathway to Stability". 

He said fair pricing in the electricity market, including gas and mass-scale metering, will see more significant investments in the energy market. 

According to him, steady power holds the key to economic growth, SME development, and the informal sector's growth, snowballing effect on employment and improved revenue generation in the country. 

He believed it was an opportunity for the Distribution Companies to recoup their investments and channel them to efficient service delivery by removing the electricity subsidy. 

He called on the government to ensure that its parastatals, including the military and police formations, comply with their electricity tariffs. 

Providing his perspective on the energy sector interventions, including the Power Aviation Intervention Fund, PAIF and the Electricity Market Stabilization Fund, EMSF, the expert decried that these government efforts have been poor in approach and execution. 

"Every intervention should have an objective, strategy and expected outcome, without which it will serve as a channel for corruption. The current power sector interventions have not served the populace's interest and need to be reviewed". 

On the Nigerian energy sector outlook, he identified the foreign exchange market volatility as one area that needs to be addressed to unlock more opportunities in the industry. 

In the short term, he said volatility in pricing would be an issue for the sector, but it will be sustainable and attract more investments in the long-term. 

He added that the next phase of the privatization of the generation companies would be critical. If done correctly, it would improve the power supply, which will reduce the cost of doing business in Nigeria. 

Mukhtar Mohammed said Pricing, Generation, Distribution and Metering are four key indicators that Nigeria must get right to achieve a viable energy sector. 

Nigeria's power sector was privatized in 2013, with licenses given to Distribution and Generation companies. 

Transmission in the power sector value chain remains under the control of the government.

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