‘Nigerian banks likely to collapse if Discos fail’

Daily Nigerian
0
238
Nigerian-Banks
Nigerian-Banks

The electricity distribution companies, Discos, through the Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors, Sunday Oduntan, described the liquidity crisis in the sector as a major issue.

Mr Oduntan, who stated this during at a press conference in Lagos, stressed the need for the government to put in place a cost-reflective tariff, as any failure by the Discos might likely lead to the collapse of the nation’s banking sector.

He said, “There is a need for collaboration among stakeholders in the sector to proffer solutions to the problems. So, we are willing any day; if we are called today for discussions, we will be there because we know that our businesses are at risk.

“This is very important for all of us to note: if the Discos collapse today, many Nigerian banks will collapse too.

“In case you don’t know, when they were selling the entities, only one of the Discos had foreign direct investment. All the others borrowed money from local banks, and they paid for the assets in dollars.

“The point is that those who have put their money in the sector will be the first persons to wish that the system succeeds, because the failure of the system means their money is also going down the drain.”