In a joint statement on Wednesday, August 8, six power generating companies, which had bought parts of the now-defunct Power Holding Company of Nigeria (PHCN), said they would shut down electricity generation very soon if the debt, totalling around N156 billion ($485-million) is not paid up in full.
They are particularly annoyed that the naira has lost 40% of its value since the government dumped its initial ceiling of 197 naira to the dollar in June in a bid to lure back foreign investors who fled both the equities and bond markets after the plunge in crude prices.
The companies feel that the crashing naira has greatly decreased the value of the money they are owed.
“In 2013, exchange rate was 150 naira per dollar. Today, it is 310. How can we repair, equip, acquire new turbines at this rate of 310 naira per dollar and yet still operate with an old tariff?” said the companies.
“(A) shutdown is indeed imminent,” they said in the statement. Federal government has already paid arrears of N186.7billion and the central bank has stepped in with a $213billion loan to keep the system afloat and allow the power firms to access credit, but more is reportedly needed as the oil price slump pressures Nigeria’s currency. NAIJ.com gathers that several Nigerian companies have declared losses as a result of poor electricity and low purchasing power of citizens because of harsh economic conditions.
Four major blue-chip Nigerian companies have reportedly lost as much as N51.86 billion in the first half of 2016 as the economy continues to take a dip.
NAIJ.COM
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