A Senior Advocate of Nigeria and Professor of Law, Yemi Oke, has advocated for a comprehensive overhaul of Nigeria’s power sector. He asserts that only a new wave of investment and a reconfiguration of ownership can effectively tackle the sector's long-standing problems, suggesting that current government efforts are not enough.
In an interview with ARISE News, Oke acknowledged the persistent liquidity challenges that have hampered operations across the power sector's value chain.
Oke’s perspective comes as the federal government prepares to clear ₦3.3 trillion in outstanding debts owed to power generation companies. While he views this debt settlement as a constructive move, he emphasized that financial infusions alone will not resolve the inherent inefficiencies plagening the sector.
"The sector has been bedeviled by liquidity crisis," he stated, highlighting how unresolved debts have significantly impacted its performance and capacity for growth.
However, he found the government's verified debt figure and the proposed ₦3.3 trillion settlement to be realistic given the current economic climate within the industry.
"$3.3$ trillion Naira being offered as full and final payment… seems to me sufficient in terms of industry reality," Oke remarked.
Despite this financial measure, Oke underscored the critical need for more profound structural reforms, particularly concerning the attraction of new capital and expertise.
"We can’t escape the reality… going via another round of re-acquisitionary financing in the power sector," he commented.
He proposed that the path forward involves reopening the sector to new investors through partial or complete ownership transfers, thereby facilitating the influx of fresh capital and innovative strategies.
"Another round of funds must come in… New entities will need to come," he explained, pointing to the necessity of mergers, acquisitions, and concession agreements.
Oke drew a parallel between these proposed reforms and the banking sector consolidation initiated by former Central Bank Governor Charles Soludo, which successfully strengthened Nigerian banks and enhanced their global standing.
Furthermore, Oke stressed that both the generation and transmission segments of the power sector require urgent restructuring, cautioning that many existing operators are either struggling financially or are technically insolvent.
He argued that without a concerted effort to revise ownership frameworks and attract reputable investors, the sector's underperformance will persist.
"Until we rejig and redo what has been done, we might not likely going to get to where we’re going," he concluded.
Oke reiterated that while settling outstanding debts is a necessary step, only decisive reforms encompassing new investments, structural realignments, and strategic repositioning can pave the way for a stable and efficient power sector in Nigeria.
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