The Central Bank of Nigeria (CBN) is one of the unsung heroes of the country’s on-going power privatisation programme, it has emerged. The programme, which promises to end the country’s notorious power generation and supply problems, entered the next gear last Friday (Nov. 1) with the transfer of the successor companies of the Power Holding Company of Nigeria (PHCN) to successful bidders by the Nigerian Government.

Speaking this morning in Lagos, CBN Governor Sanusi Lamido Sanusi highlighted the apex bank’s role in providing support for the electric power privatization, a critical component of the Transformation Agenda of the Goodluck Jonathan Administration. He disclosed that CBN in 2011 approved a grant of US$10.0 million (about N1.6 trillion) to the Bureau for Public Enterprises (BPE) “to support the engagement of Human Resources and Actuarial Valuation Advisers for Successor Companies of PHCN and to fund the activities of the FGN negotiations team that will negotiate severance liabilities with the unions of PHCN.”

Sanusi, who spoke while declaring open the Second Bi-Ennial Regional Conference of the West African Institute for Financial and Economic Management (WAIFEM), said that “in addition the Bank provided the much needed long tenured, fixed and single digit interest rate funds for power investments through the N300 billion Power and Airline Intervention Fund (PAIF) in March 2010. This is to fast-track the development of electric power projects through the provision of the much needed long tenured, fixed interest funds to catalyse private sector investments in the power sector. As at 30th September, 2013, the sum of N109.3 billion has been disbursed to twenty (20) companies, by eleven (11) deposit money banks. The Fund has, among others, financed the construction of 125-kilometre gas to power pipeline and the generation of about 800 MW of power mostly by manufacturing companies principally to guarantee stable and reliable power supply and to free the national grid to other users.”

On the conference theme, “Financing Infrastructure for Sustainable Development”, the CBN Governor advised governments across Africa to explore alternative sources of funding for the development of public infrastructure.

He demolished the myth that it is the duty of the private sector to provide public infrastructure. “Who built the roads in America?” he asked, drawing attention to what obtains elsewhere in the world.

“The private sector,” according to the CBN Governor, “cannot provide all the infrastructure. Government cannot abdicate its responsibility. Government will have to provide most of the infrastructure.”

Since government’s resources are limited and traditional sources of funding are no longer adequate, Sanusi advocated: “We should look beyond traditional sources of funding to finance infrastructure development.”

The CBN Governor made a strong case for a resort to bonds, pointing out that “bonds are one of the cheap ways of financing infrastructure. He cited the United Kingdom, which has decided to take advantage of international Islamic bonds to finance infrastructure.

The two-day conference holding at Golden Tulip Hotel in FESTAC is being attended by financial experts from across West Africa. It is organised by WAIFEM in collaboration with the Development Finance Department of the Central Bank of Nigeria and the African Capacity Building Foundation (ACBF).

•Photo shows CBN Governor, Lamido Sanusi Lamido.

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