The President and CEO of Dangote group, Aliko Dangote has gushed his feeling towards privatisation of power sector in Nigeria and he said they lack ideas of the complexity of the industry, hence holding the country on ransom.
Speaking as a guest lecturer at the Senior Executive course 38 at the National Institute of Policy and Strategic Studies (NIPSS), Kuru, in Plateau State, Dangote said despite privatisation deal, problem in the power sector has persisted because the buyers lack understanding of the complexities of the sector.
According to the billionaire, lack of understanding of the sector, the generating and distribution companies are now holding the country to ransom. Below is a full
“What government did was to privatise but the privatisation was done wrongly. People who wanted to buy all these plants, both the generating and distribution companies, thought that this was another opportunity like mobile phones, where we have moved from 500,000 lines in 2000 and in ten years we now have 120 million lines.
“Yes it would have been so but these guys, what they did when they bought these power plants was that they borrowed 90% of the money in foreign currency. You cannot go and borrow dollars when your base income is in naira, you will have an issue because your earnings are in naira you are taking a huge exchange risk and that is what happened today.
“These are guys, with respect to them, when I say guys I don’t mean 100% of them but the majority of them went in without even understanding what they are doing and the worst thing for any entrepreneur is to go into a business without understanding it.”
Mr. Dangote explained that no one should venture into any business, no matter how profitable it might seem, without a detailed knowledge of how it works, otherwise it’s a lost cause.
“If you wake me up in the middle of the night on any of the businesses we are doing today, even the new ones I will be able to explain it to you, I know my entry and I know my exit but unfortunately that is what these guys did and today they are holding the entire nation to ransom, it is very embarrassing for us.”
“Today, how can we say that we don’t have 300,000 prepaid meters? things have changed you cannot go and charge a rate and then follow people one by one to pay without the aid of a prepaid meter. With prepaid meters people can pay for power supply at their convenient time instead of chasing them to pay bills.
“And it is also estimated that 30% of the overhead costs of businesses in the country go into the provision of alternative source of power. This affects their revenue and profitability.”
The Africa’s richest man said Nigeria will never be able to supply electricity if government does not intervene by taking back these assets and giving them to people who can finance the sector to function efficiently. He advised government to identify the giant techs who are serious about elevating the sector.
“My own advice is that government should sit down with them and negotiate the best way out because we need power, we are desperate for power and if there is no power, there will be no growth because if you look at the medium and small industries, most of their income goes into buying diesel or petrol to generate power and that shouldn’t be the case.”
Dangote express believe that enough power supply will double the country’s GDP.
“If we generate power, majority of the States that are rushing to Abuja to collect monthly pay won’t even go because they will be able to generate enough economic activities where you will be able to tax people and you can only tax somebody who is making money.”
The business mogul also spoke on constrains to entrepreneurs include inconsistency in government policies, taxes as well as poor road networks, and he pointed at the fact that Nigeria has plethora of raw materials that can provide inputs to various sectors particularly the agro-allied and extractive industries.
According to him, ‘any business in which you will not use local materials is dangerous’.