MOFI: TCN’s transmission limitations hampering investment in power sector

The ministry of finance incorporated (MOFI) says the success of state-owned enterprises is vital for Nigeria’s economic growth.

Armstrong Takang, managing director (MD) of MOFI, spoke on the vital contributions of state-owned enterprises across various sectors at the 2024 annual corporate governance conference in Lagos on Thursday.

Takang, addressing the challenges in the power and energy sectors, said the Transmission Company of Nigeria (TCN) is pivotal to unlocking investment opportunities.

The managing director said TCN’s current transmission limitations have hampered businesses from fully investing in the power sector.

He, however, expressed optimism that with proper reforms, the transmission company could shift from being a bottleneck to a catalyst for sectoral growth.

“Today, a lot of businesses are struggling to make a business case to invest in the power sector because there’s a constraint in the transmission capability of TCN, a stranded power that has been generated but cannot reach a point of use,” Takang said.

“TCN can either be a bottleneck for opening up opportunities in that sector or be a catalyst for opening that up.

“Imagine that the DisCos as they were deregulated and privatised 10 years ago, had delivered on the promise to provide light, not only for our homes, communities, but also to drive businesses had delivered on that promise. Where do you think we would be today?”

The MOFI boss also said transformation is underway at the Nigerian National Petroleum Corporation (NNPC), which is tasked with ensuring energy security.

He acknowledged that significant progress has been made at the national oil firm but said more work still needs to be done to achieve its full potential.

On the financial sector, Takang said the Bank of Industry (BOI) could be one of Nigeria’s “shining stars” if its capital base was expanded to mobilise additional capital for industrialisation.

“Imagine that Nexim Bank that is meant to drive import and exports, had delivered on the promise of facilitating exports and to bring back export proceeds. Do you think that the challenge we’re having today with FX will be there?” he asked.

“Imagine if we had Bank of Industry, this might be one of our shining stars, had five or six times its capital base, equity base, and is able to mobilise additional capital to drive our industrialisation. Where do you think we will be?

“I am sure you would agree with me that all of these enterprises that I have mentioned are vital for the economy of Nigeria.”

‘SUCCESS OF STATE-OWNED ENTERPRISES WILL HELP CONTROL INFLATION’

The MOFI chief said the success of the aforementioned enterprises would have far-reaching effects on the country’s economy, including bringing about macroeconomic stability, controlling inflation, creating jobs, and providing an enabling environment for the private sector.

Takang warned, however, that without strong corporate governance and sustainability practices in these enterprises, Nigeria’s growth prospects would be hindered.