Director for the African Department of the International Monetary Fund (IMF), Mrs Antoinette Sayeh, has said that irregular power supply is a major cause of the setback that Nigeria presently encounters.
Speaking to reporters at the just-concluded Spring Meetings of the World Bank/IMF in Washington, DC, the official also added that electricity is a huge constraint to growth and to the ambitions that many sub-Saharan African countries face to diversify and have structural transformation realized in the immediate future.
“Some countries want it yesterday. Its not just low income countries in the region, but across the board as we see now in also South Africa, struggling with the electricity problems as well. Nigeria also very challenged on that account” she said.
Mrs Sayeh pressed further that countries certainly want and have expressed their desire to invest more heavily in infrastructure that permits them to generate and distribute more electricity and power, stressing that for that, they need to both redouble their efforts to create their own fiscal space, make room in their budgets to finance more investments by, of course, doing better on the issue of resource mobilization, revenue mobilization, but also better prioritizing their expenditures in their budgets and being able to, therefore, have more room to finance infrastructure.
“But, of course, their ability to finance infrastructure is limited. In addition to public sector borrowing for infrastructure purposes, itâ€™s a huge need and countries are very interested in increasing their partnerships with the private sector through public-private partnerships to do better in terms of infrastructure financing and innovating with the capacity that private participants can bring to the table.
So a number of things including, of course, generating more of their own revenue; entering into more partnerships with the private sector and those partnerships, of course, have benefits, but they also have risks that need to be properly managed; a regulatory framework that appropriately takes account of those risks; procurement practices that are amenable to making sure that the public sector gets the best out of this and, of course, the private sector gets the returns that theyâ€™re looking for; and even beyond the immediate investments, of course, there are policy issues that countries also need to deal with” she added.
The IMF’s official continued that a number of countries currently have the public sector providers of electricity and power that are not permitted to recover their costs that they have in generating those through tariffs they are not allowed to adjust to take account of those costs. She also said that tariff reforms, electricity tariff reforms, are also an important thing and making sure that those continue to allow companies to cover their costs. So a package of reforms that countries will need to take forward to do better in the way of providing more electricity.