Nigeria’s umbrella Bankers’ Committee has warned that the country stands to lose US$130 billion annually due to the delay in concluding the ongoing power sector reforms.
The private BusinessDay newspaper Monday quoted Committee Chairman Aigboje Imoukhuede as saying the power sector remained a major catalyst for transformation and sustainable growth of the Nigeria economy.
He said Nigeria’s epileptic power supply had continued to remain a clog in the wheel of the nation’s rapid economic development, eating deep into profits of businesses, particularly profit margins of companies in the real sector which continue to incur huge expenses in powering their business.
“In recognition of the critical role of the power sector, the Bankers’ Committee notes the potential impact on growth and development of Nigeria’s real sector, which directly correlates to the supply of power, (and that) 10 percent improvement in power supply could increase GDP by 2-3 percent per annum,” Imoukhuede said.
The Banker’s Committee comprises the Chief Executive Officers of the commercial banks operating in the country. The members meet quarterly to access the financial situation and make suggestion for improvement.
In 2009, the Bankers’ Committee identified three sectors of the economy: power, agriculture and transportation, as most critical for the nation’s economic development and growth.
While there are indicators of success towards the achievement of the Power Sector Transformation Programme, there are issues that remains and some challenges that may derail the programme.
These include integrity of the market operator settlement system, conclusion of Government Credit Enhancement for Independent Power Projects (IPPs) and resolution of labour issues in the sector.
Others are the liquidation of the Power Holding Company of Nigeria, Clarity of Partial Risk Guarantee and the Federal Government’s financial support/guarantees, as well as availability of financing for the Transmission Company of Nigeria.