At the beginning of the 21st century when Nigeria liberalized the telecom sector, it became an instant hit with investors and early starters like the MTN Group reaped bountifully and for more than a decade, that sector continues to compete with oil and gas in terms of investment opportunities.
With President Goodluck Jonathan’s unbundling of the state owned power company, power holding company of Nigeria (PHCN) into 11 distinct distribution and generating companies last week, investors are already viewing the country’s power sector as the next big thing in terms of investment opportunities.
Collins Onuegbu, managing director and CEO of Signal Alliance, a Lagos based full IT service company stated that the power sector would need a full audit into IT involvement – comparatively, the telecom sector.
“The power sector lacks efficiency which allows for leakages in revenue drive and this can only be fixed by effective deployment of necessary technologies. Revenue assurance technology investment is needed to not only plug all yearning revenue gaps in the system, but to also assure investors of actual returns-on-investment,” said Onuegbu.
Benjamin Dikki, director general of the Bureau of Public Enterprises (BPE), the government agency given the responsibility to midwife the power sector libralisation process had stated last week that new investors in the sector would need about $1.8 billion (approximately Naira288 billion) capital investment into the sector over the next five years to attain level of stability.
Onuegbu concurred, but added that the investors also understand that IT drives all critical and essential sectors globally. “IT runs every essential thing in the world right now. Everything that is complex today is run by IT. So the power stability will not just happen overnight, it will take some time for it to evolve, and this means, a lot of investment is needed in terms of IT infrastructure.”
He noted that operators would need to be educated on the right IT infrastructure necessary to drive the sector and to create the right framework on knowledge investment.
Corruption
He identified corruption as the biggest challenge facing the new discos and gencos (acronyms for distribution and generation firms respectively). “I’d say the biggest challenge facing the power sector is corruption and investors would need to invest significantly to improve on good governance as part of the process of stabilization to improve revenue,” said Onuegbu.