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Power Sector Reforms Must be Completed

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Power

The President, Lagos Chamber of Commerce and Industry, Dr. Nike Akande, discusses how to move the nation’s economy forward in this interview with Anna Okon

What is the nation’s economic outlook for 2016?

With the cabinet in place, ongoing budget processes, drive for economic diversification, concerted efforts against corruption and the various reforms in the critical sectors, we expect to see positive developments in the economy.

This year (2016), Gross Domestic Product growth is expected to rebound, though slowly, if the right mix of fiscal and monetary policies is put in place to stimulate the economy and attract domestic and foreign investments.

While the recovery is expected to be driven by increase in government expenditure, the growth in oil sector may be constrained still by low price and dragging investment drive.

The Treasury Single Account is also expected to plug leakages, curb corrupt tendencies, increase revenue to government and thereby improve funding for government projects.

The Managing Director, International Monetary Fund, Christine Lagarde, recently paid a visit to Nigeria. The core of her visit were issues bordering on drastic fall in government revenue occasioned by the plunge in global oil prices, budget deficit financing, economic diversification and lots more. What is your take on these issues?

We must recall that the new political administration led by His Excellency, President Muhammadu Buhari came into power on May 29,, 2015 at the time the country was facing serious economic challenges as you earlier highlighted.

The challenge faced by the economy, as a result of the decrease in oil revenue, which prompted fiscal imbalances, is a global phenomenon especially among the oil-exporting countries. We need international cooperation and partnership as there is, obviously, no easy way out of the crisis. Therefore, the visit of the IMF boss is, indeed, timely as it offers us the opportunity to deliberate on these issues towards fostering the international partnership and cooperation, especially with the Fund.

Above all, the government needs to develop other sectors of the economy like manufacturing, agriculture and solid minerals and service sectors to strengthen the current economic cord.

The way to do this is to create an enabling environment in terms of the right infrastructure, affordable long-term financing and the right policies.

Nigerians are very enterprising. Once the environment is right, Nigerians will make things happen. We also need to patronise made-in-Nigeria products to encourage our local manufacturers.

There had been persisting scarcity of petroleum products leading to long queues at filling stations, traffic congestion on the roads and loss of man hours. What is LCCI’s position on the downstream petroleum sector?

The persistent fuel crisis in Nigeria again underscores the need to urgently review the current policy framework of the oil and gas industry, especially with regard to the petroleum downstream sector. We commend the efforts of the government in revamping the refineries with a view to reducing our fuel importation in the coming years. We hope to see a situation where eventually all our refineries are operating optimally and the private sector should be encouraged to participate more in the sector thereby creating jobs for Nigerians.

The private sector is ready to partner the government to make these efforts work as government must not be left alone in these endeavours.

How have your members been coping with the challenges of electricity supply and consumption in Nigeria? And what is the way out?

The power situation has been a challenge from time past and fixing it will require consistent investments in that sector. The present administration has shown that power supply is one of its top priorities.

The Honourable Minister of Power, Works and Housing, Mr. Babatunde Fashola, who was the governor of Lagos State, is known to be a go-getter.

I believe private sector businesses are ready to pay for electricity once it is available. I urge the government to continue with the pace of reforms in the sector to ensure that more electricity consumers have meters.

You are the second female president of the LCCI in its 127-year history. How would you assess the leadership opportunities for women in the corporate world in Nigeria? And what is the Chamber doing to encourage women entrepreneurs?

Women are doing well in many spheres of the corporate world. For instance, the Chairmen of First Bank, Access Bank and Guaranty Trust Bank are all women. We also have many women as Chief Executive Officers of big organisations across all sectors. We are doing well. But we can do better.

The ratio, to a large extent, is still skewed towards men. The LCCI has a vibrant women group which focuses on the advancement of the interest of women. They seek opportunities for women in all areas of enterprise and finance. They also collaborate with embassies and international organisations that have programmes for women.

In addition, the Chamber has a robust mentoring programme for young people to make them entrepreneurs. We attach these young people to our members for a period of time to teach them and share experience with them on managing businesses. The third batch of about 35 mentees graduated only a few weeks ago. We also train young entrepreneurs to build their capacities in different areas of business.

You are a two-time Minister of Industry. What was the experience like? And how would you assess the present administration from a private sector point of view?

First of all, my experience as a two-time Minister of Industry was very exciting and yet challenging. But I thank God for the opportunity to serve my country at such a high level.

During my tenure, we set up industrial development centres all over the country to support industrialisation, especially small scale industries. I also supervised many parastatals that interfaced with investors. One of them was the Nigerian Industrial Development Bank, which is now the Bank of Industry.

I have also supervised the Benue Cement Company, the Machine Tools, Oshogbo and many more.

Frankly speaking, the government has been doing a great job fighting terrorism. You know you cannot do business when security is not guaranteed.

Also, the government has also been doing a lot in fighting corruption which is also one of the biggest problems we have in the country.

With the new budget and some new policies, I am sure we will have more programmes and activities this year. We will continue to give government the necessary support to make the country better.

As the new President of the Lagos Chamber of Commerce and Industry, what is your vision for the chamber and how do you plan to achieve it?

First of all, I give glory to the Almighty God for the opportunity to serve my country on this platform and in this capacity. I am also grateful to members of the LCCI for electing me. Being the President of the Chamber is, indeed, a great task. I will, therefore, be resolute in contributing my quota to the advancement of the cause of the Nigerian private sector and the progress of our economy as a whole.

Furthermore, while a lot has been done by all my predecessors towards achieving the core objectives of the Chamber, I am prepared to build on their worthy legacies by pushing the frontiers as regards strengthening the effectiveness of the LCCI advocacy and research activities to create a more conducive environment for investors.

We will also work towards putting in place strategic innovative programmes to attract and retain more members across sectors. In fact, since my assumption of office, quite a number of people have shown interest in joining the Chamber.

Also, we will diversify our trade fairs and exhibitions to cover more sectors and specialised exhibitions thus making it the best in Africa.

We aim to consolidate on the landmark achievements of our training arm through which we embark on capacity building for Small and Medium Enterprises.

We are looking at improved close collaboration and partnership with federal and state governments as well as the private sector to improve the business environment.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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power project

Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Economy

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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petrol Oil

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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