The President/CEO Dangote Group, Aliko Dangote has said the power sector privatisation was done wrongly and suggested it should be reversed.

He said the problem in the power sector has persisted despite privatisation because the buyers lack understanding of the complexities of the sector.

Dangote made the assertion as a guest lecturer at the Senior Executive course 38 at the National Institute of Policy and Strategic Studies (NIPSS), Kuru, in Plateau State.

He spoke on “Promotion of Local Manufacturing and Poverty Reduction in Nigeria: The Private Sector Experience and Policy Options”.

He said because of lack of understanding of the sector, the generating and distribution companies are now holding the country to ransom.

The African richest man said unless the federal government quickly decides on taking back the assets and giving them to people who have the capacity to inject money, the country may not be able to deliver on power.

He said: “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 120million 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.”

“If you don’t understand a business no matter how much money they show you that you are going to make, how much profit, don’t go into where somebody has to come and sit you down and start explaining because if he is doing something wrong, you don’t have any way of challenging him.

“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 you have to follow people one by one to be scheming for them to pay but with a prepaid meter, once you buy for N10,000 after the N10,000 you have to remain in darkness so it is not an issue to start chasing people to pay. 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.”

“We should be as open as we can if government doesn’t intervene by taking back these assets and giving them to people who really have money that they can really inject, we will not be able to deliver on power.

“We should ask, how many people, who and who are these guys that have actually gone into the power sector then you will know when you see the quality of people, are they really serious, because they went in to just make money, power business is not just about money, it is a huge business when you invest heavily you will reap at the end of the day.

“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 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.

“I believe with enough power we will have tremendous growth we are not going to be in negative GDP growth, in fact it will double digit growth, an inclusive one not the one that only the likes of MTN, DANGOTE and co will be making profit, everybody will feel it and that is the kind of GDP growth we are looking for.

“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.”

He said apart from the epileptic power supply in the country, other constrains to entrepreneurs include inconsistency in government policies, taxes as well as poor road networks.

“Nigeria has a plethora of raw materials that can provide inputs to various sectors particularly the agro-allied and extractive industries. Any business in which you will not use local materials is dangerous.”

Former Vice President, Atiku Abubakar, also gave similar advise at the 36th Kaduna International Trade Fair in April when he asked President Muhammadu Buhari to reverse the sale.

Five Generation companies (Gencos) and 11 Distribution companies (Discos) were handed over to private investors on November 1, 2013 with 60 per cent stakes in the former PHCN utilities.

According to the Service Level Agreements (SLA) held with the Bureau of Public Enterprises (BPE), the firms assured of metering electricity consumers and significantly reducing the collection and technical losses in the sector within five years.

Read more at http://www.dailytrust.com.ng/news/general/dangote-to-fg-reverse-power-privatisation/169010.html#27zVFsq1v5PPLJpB.99

Dangote with another one.. This what they would talk about again for the next one month..

Dangote keeps dropping new topics every end of the month..

Dangote advising FG on power sector......hmmmmm because he was not one of the beneficiaries

Businessmen and competition

Not only a reversal, moves should be made to put all the perpetrators of the national daylight robbery in jail & the keys thrown in the lagoon...

Hopefully, the get out clause in dem contacts won't be too severe, unlike the ones the IB signed (probably in a drunken state) for the... nuff said..

Maybe you didn't buy

Just the truth.

At this period, if prepaid metering is still over 50%, something is wrong with the management techno.

The investors' source of capital can't sustain the power target. Privatization shouldn't create overnight billionaire alone but should solve the problem on ground.

Any privatization should have at least 49% of its capital on stock exchange, then government has given public properties to the public and not to the cabal

Dangote am with you on this one. You spoke my mind. If they can't take it back, they break the Discos into smaller units to control. More investors take up units, this way employment will be plenty n competition comes in which will drive the power market exponentially

Touche

This was exactly my take on the privatization. It was just for the boys. We are all bearing the brunt of that fraudulent exercise. Unfortunately, GEJ government legally protected these cowboys from being pushed out. We have to find a way around this mess.

Dangote is right. Government, please listen and call him to participate in reordering the Power Sector. __by afgg.

The buyers have consistently failed to put money into the sector despite reaping billions this is just wrong, I wish a performance clause was made part of the rules governing the sales.

I agree oh!

This country is a major joke! Buyers didn't even renovate their offices talk more of the power facilities.
This is total ripoff and their licenses should be revoked.

Simple metering they couldn't achieve and they keep pushing for higher tariff when the masses are not even seeing any improvements.

Nigeria, does anything ever work in this country?

The man is Joking
The FG is still Sitting on power transmission even if power is generated now FG transmission cant handle it

Govt is not yet interested in providing light in this country
Because if they are the 1st step is to Balkanize generation,transmission and
Distribution.make it a level field for everyone to participate.
What I mean is every local govt ,estate or conglomerates of streets can
Generate,transmit and distribute their light to end user without going tru
D national grid.let every one provides their infrastructure and make money.govt
Should just regulate and fix pricing....qed I don't know if that requires Nobel laureate
To tell us as a country! 2016 dangote is still telling govt to reverse d sale!
Because he didn't benefit from d sale or out of his own intuition or paid feasibility studies
Or research?atimes I wonder why d most simplest of all things world over is always the
Most difficult thing to achieve in Nigeria!! E.g national I'd card,tinted permit,tax remittances,
Death and birth records-no data base .NPC wants to do census again when all we need was
Just a census and consolidated birth/death records.with a touch of button we shd b able to tell
How many Nigerians we are as of today not brandishing unconfirmed estimates....Infact I think
It's those God doesnt likes,rejects and retards he made Nigerians!