The Federal Government of Nigeria (FG) has announced plans to escrow revenue accounts of the Electricity distribution companies whilst simultaneously seeking funding from the World Bank for investment in stabilisation of the sector.
This seems like little more than stealth re-nationalisation of the industry – a foul cried by industry figures themselves.
Once, when discussing with a large institutional international investor the prospect of investing in Nigeria, he said “I will not be putting our money there. At the first sign of trouble they will nationalise any successful business to provide government revenue”.
This may not be the case in this instance but the latest positioning from the FG does raise the prospect.
The FG proposes that all revenue from the privately owned distribution companies should be placed in escrow.
The conditions for extraction from escrow are not entirely clear, but it would not matter if they were.
The threat of nationalisation and strangling state control is clear.
Meanwhile, we also hear the FG leak information that they are in final discussions with the World Bank on securing funding for investment into the Electricity sector.
The World Bank are not necessarily the brightest sparks and so may or may not have suitable conditions precedent for the lending to materialise.
Their bleeding heart liberalness meaning they may dole out the cash anyway, allowing themselves knowingly to be duped…after all its not their money.
If we put these two elements together i.e. funding sources controlled by the FG and control over revenue accounts by the FG, we are left with a Marxist state control of the means of electricity production.
There is clearly not room for private investment.
No right minded private investors would step in.
Current ownership of Discos will be cancelled and the FG will step in with their cronies to take over the sector.
The juicy fruit is too low hanging and too sweet to ignore.
It matters not what the FG now says, no investors (foreign or domestic) will touch the sector.
At least, not anyone without friends in the right places.
Watch the movements of the connected elite around this sector. Their actions will be telling.