FG Plans to Raise N90bn from Sales of Power Assets
By Sodeinde Temidayo David
The federal government has revealed plans to raise the sum of N90 billion from the sales of power assets under its National Integrated Power Projects (NIPPs) to help finance part of the 2022 budget.
This revelation of the government’s projection was made by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed.
According to Mrs Ahmed, the power assets set to be sold would be of mostly government-owned power firms.
“We are projecting that in 2022 there will be more of these NIPPs that will be sold and from which we’ll realize this N90.3 billion,” the Minister stated.
This is in continuation of the unbundling and privatization of the power sector in order to establish a competitive and efficient market to attract investment, increase revenue and provide a reliable and cost-efficient power supply.
The NIPP, which was established under the administration of the country’s former president, Mr Olusegun Obasanjo, is the government vehicle that owns several power generation plants in the country.
The Minister expressed that the federal government is not generating enough revenue to fund its various projects like roads, rail and water and as such will continue to resort to borrowing to finance these projects.
Addressing the criticisms over Nigeria’s mounting debt, Mrs Ahmed disagreed with such concerns as she said that the total size of the country’s borrowing was still within healthy and sustainable limits.
She said the total borrowing of the country is about 23 per cent of the Gross Domestic Products (GDP) as of July, which was lower than that of fellow related countries.
It could be recalled that in a privatization process that lasted for over 10 years, the federal government in 2013 sold off controlling shares in the state-owned 11 power distribution companies and 7 power generating companies to private companies.
Although the country has an installed capacity of 12,522 megawatts (MW), it is barely able to generate around 4,000 MW, which is insufficient for the population that has been estimated at over 200 million.