Continue with forex interventions, Power firms tell CBN

The Central Bank of Nigeria efforts to sustain the strength of the naira through constant pumping of dollars in the FX market has been hailed by stakeholders in the power sector.

According to them, the current dollar intervention by the apex bank has helped operators in virtually all the value chain in the power sector, adding that sustaining the development will further enhance the performance of power companies across the country.

The Managing Director/Chief Executive Officer of Copperbelt Energy Corporation, one of the core investors in Abuja Electricity Distribution Company, Mr. Emmanuel Katepa, said that things were tough for many power distribution companies with respect to accessing forex prior to the CBN’s intervention.

He said, “The interventions by the CBN are very significant and commendable. Before the interventions, things were very tough for many Discos including our company. But with the interventions, we believe things should become mild.”

Katepa also noted that it was important to have a cost-reflective tariff in Nigeria, but admitted that such a move could not be presented to the public at the moment, as it would be resisted by Nigerians.

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He said, “What we have now is not cost-reflective. However, as operators, we recognise that a proper cost-reflective tariff right now in Nigeria will create a disturbance, because prices would have to jump up. This will leave us where our ability to collect revenue will be affected, because you cannot negotiate beyond certain point where consumers simply cannot pay; so we recognise that reality.”

Also speaking on the forex interventions by the CBN, the Executive Director, Association of National Electricity Distributors, an umbrella body for the Discos, Mr. Sunday Oduntan, commended the apex bank.

He stated that the power sector required huge funds, as most facilities used in the industry were imported, adding that forex was needed to carry out transactions that had to do with such imports.

The naira in the last four weeks has consistently sustained its appreciation drive against the dollar, moving from a frightening N500 to a dollar in January to less than N400 in weeks.

This appreciation, National Daily gathered is being driven by decline in demand for dollars occasioned by increase dollar supply by the Central Bank of Nigeria which is now over $2,2bn in less than four weeks.