The reconstituted supervisory board of the Transmission Company of Nigeria (TCN) has asked the federal government to finance expansion projects in Nigeria’s power sector with funds from the Excess Crude Account (ECA).
Chairman of the board and a onetime chairman of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) Haman Tukur, who spoke shortly after the board’s inauguration by the Minister of Power, Prof. Chinedu Nebo, yesterday in Abuja, asked the government to set aside at least $2 above the official benchmark price of crude oil to finance projects in the power sector.
Tukur noted that his experience while in charge of affairs at the RMAFC showed that Nigeria’s revenue inflow from her crude oil resources would be sufficient to fund projects in the country’s power sector, adding that Nigeria has no excuse generating below 4,000MW of electricity.
“We have no reason for Nigeria to generate 4,000MW for a country of 160 million people, honourable minister. I will like to hold you and the Minister of State for Power responsible and not the TCN board to take us to that stage to give Nigerians the power for industrialisation.
“We have been speaking English for the past 15-20 years but it is time for you people on this board to do something, otherwise it will be a shame; we have to move, we have to convince the presidency and executive arm of government to move Nigeria to where it ought to be,” Tukur said.
He added: “Now, I often hear the presidency and members of the National Assembly complaining that we have no resources. I served as the head of revenue mobilisation for 10 years and I worked on the resources of Nigeria and I know Nigeria has the resources.
“Honourable minister, I just want to give you one quick example: Every year, we fix our budgets at a benchmark crude oil price… Let’s put it at $80 and if you sell that crude oil at $100 and you have a difference of $20. In other countries, that is the difference they use to develop their infrastructure.
“Honourable minister just demand for $2 out of every barrel every day; it is not going to affect the budget of the federation, nor the federal government, state or local governments, because the benchmark is what the budget is built upon.
“We design the formula for the distribution of the resources of this country, so I happen to know that the dollar is there, take it. Sir, for goodness sake take $2 out of this money, it is within the law and we would have a developed power sector.”
Before Tukur made his case for funding the power sector, Nebo had explained government’s decision to reconstitute the TCN board, saying it was President Goodluck Jonathan’s decision to add new members to give the board greater focus, dynamism and bearing to perform.
According to him, government will lend support to the board in sourcing and securing funding for prudent investments in the transmission infrastructure.
The 18-man board is headed by Tukur, and assisted by the former chairman of Skye Bank, Akinsola Akinfemiwa, while Garba Sanusi, Prof. Peter Akpor, Mrs. L. Shuaibu and Okwudili Ikejiani are representatives of the Ministries of Power, Justice, Finance and Petroleum Resources respectively.
Others include Mike Uzoigwe for the generation companies, O.C. Akamnonu for distribution companies, Dr. Sam Egwu, Jonathan I. Adole, Prof. Aako Ugbage, Dr. Ferguson Tobins, Joseph Makoju for Manufacturers’ Association of Nigeria (MAN), Don Priestman for TCN, Benjamin Dikki, M.M Gumel, and Abubakar Tambuwal.
In the meantime, the Nigeria Sovereign Investment Authority (NSIA), operator of the Sovereign Wealth Fund (SWF), has appointed Goldman Sachs, Credit Suisse and UBS as asset managers for its Stabilisation Fund.
The Stabilisation Fund, which is one of the three ring-fenced components of the SWF, is intended to act as a buffer against short-term macro-economic instability.
In a statement made available to THISDAY last night, NSIA Managing Director/Chief Executive Officer, Mr. Uche Orji, stated that UBS was selected to manage the US Treasury Bond portfolio while Goldman Sachs and Credit Suisse were selected to manage the investment grade US corporate bond portfolio.
The Stabilisation Fund’s assets will be invested conservatively, with capital preservation in nominal terms being of primary importance. Given the short-term nature of the fund’s potential liabilities, the fund is restricted to investing in investment grade sovereign and corporate fixed income assets.
The initial benchmark is a blend of 25 per cent Barclays 1-3 year US Treasury Bonds and 75 per cent Barclays 1-3 year US Corporate Bond Index.
“This marks another important milestone for NSIA and follows a comprehensive process of review and evaluation of world class candidates for this mandate.
“The appointment of three leading global investment banks to assist with the management of the Stabilisation Fund – drawing on the particular expertise of each to match our investment management requirements – will help us achieve the economic policy objectives set for NSIA and attain the highest standards of financial stewardship to which NSIA aspires,” Orji said.
Information from This Day was used in this report.