The African Finance Corporation (AFC) has urged the federal government to ensure adjustments in electricity tariffs. This aims to attract investments into the power sector.
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Mr. Andrew Alli is the managing director of AFC. He was speaking at the 2017 annual conference of the Finance Correspondents Association of Nigeria (FICAN). He cited the importance of power and the need for it to attract more investments into the sector. That is, an adjustment would attract more investors since the government is unable to fund all its infrastructure deficit.
What the government needs to do
He also added that the government needs to invest in infrastructure yearly. Sourcing funds from both the private or public to invest.Unfortunately he notes that many constraints have been a hindrance to infrastructure funding in the country. This is despite the investment opportunities and attractive returns on investments in the country.
Mr. Alli says that the government of Nigeria is getting to its limit of financing infrastructure. It also requires to establish adequate environment for the funds to come into the country. According to him if the country does not have an economic cost reflective tariffs, then the desired funding cannot be achieved. Mr. Alli adds that there is a need for political will to ensure that setting of appropriate tariffs happens.
He says that as the government is increasingly borrowing it is getting to its limit on its ability to spend. Hence the country is significantly constrained and this is where the private sector comes in according to Mr. Alli.
Chidi Izuwah is the Director General of the Infrastructure Concession Regulatory Commission(ICRC). According to him, Nigeria is open to several financing options . But the constraints facing the infrastructure sector make it hard to get the funding the country desires.
