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Power System Collapses Four Times in Five Days

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  • Power System Collapses Four Times in Five Days

The frequency of system collapse in the nation’s power sector in recent times has resulted in prolonged blackout in many locations across the country.

Findings showed that between January 15 and January 19, 2017, the country recorded two cases of total system collapse and three partial ones.

Specifically, the total collapse of the power grid occurred on January 15 and 19, while on January 16 and 18, Nigeria’s electricity generation crashed to 108 megawatts and 49.2MW, respectively. The average electricity generation for Nigeria has always been around 3,500MW.

The daily industry operational report for January 19, 2017, which was obtained by our correspondent in Abuja, showed that a total system collapse occurred around 6pm that day.

It stated, “Total system collapse at approximately 1800 hours on January 19, 2017 – details pending. Alaoji NIPP is out of service due to gas constraints; condensate evacuation challenges limiting gas supply to Geregu, Sapele and Olorunsogo plants.”

Similarly, data from the industry further indicated a total collapse that occurred on January 15, after which seven power plants were restarted in order to fire up supply.

The operational report had stated, “Total system collapse occurred on 15th January, 2017; Ugwuaji/Makurdi 330kV line 1 (cct U1A) CB tripped at Ugwuaji transmission station on distance protection 3-Phases; the SOTF and trip relay operated.

“Poor generation, lack of units on spinning reserve/frequency response and lack of enough feeders on under frequency relay scheme were responsible for the collapse.”

The next day, seven plants were restarted and they included Transcorp, Sapele I and II, Afam VI, Omotosho I and II, Olorunsogo I, Geregu I, and Okpai.

Power consumers have continued to lament the sorry state of the industry as the development has led to prolonged blackout in various communities.

For instance, the Ibadan Electricity Distribution Company on Thursday explained that the blackout at Magboro/Mowe/Ibafo communities of Lagos-Ibadan Expressway in Ogun State was due to the limited supply of electricity allocated to the IBEDC.

The firm had said, “The IBEDC is a distribution company and we can only distribute the power that is delivered to us from the national grid. Any current power outage being experienced by these communities is as a result of the reduced power supply from the grid, which is not within our control.

“This is evident in the fact that the national grid has already experienced two system collapses within the first two weeks of this month. As we speak, power is still being supplied to Asese, Ibafo, Magboro, and environs on a daily basis. However, the quantum is dependent on our allocation, which has been extremely inadequate.”

Industry operators told our correspondent that aside from the issue of gas constraint to power plants, Nigeria’s electricity transmission network needed to be revamped.

They explained that many transmission infrastructural facilities were obsolete and could not take high electricity load from generation companies; neither could they transmit the power to distribution firms.

Although they noted that the government was working on the transmission network, they pointed out that gas constraint to thermal power turbines across the country was also a major limiting factor to electricity generation in Nigeria.

Late last year, the President, Nigeria Gas Association, Mr. Dada Thomas, told our correspondent that gas suppliers were owed over N100bn by power generation companies and that it was becoming difficult to supply gas to the firm’s due to their huge indebtedness.

The Executive Secretary, Association of Power Generation Companies, Dr. Joy Ogaji, had also stated that Gencos were also owed over N300bn by the electricity distribution companies.

On their part, the Association of Nigeria Electricity Distributors, an umbrella body for the Discos, also stated that its members were owed over N100bn by consumers.

ANEDs had earlier identified the military and government ministries, departments and agencies as their biggest debtors.

Operators had put the revenue shortfall in the sector at about N1tn and requested the Federal Government to intervene financially in order to avert a collapse of the entire power system.

This, however, was not heeded as the Minister of Power, Works and Housing, Mr. Babatunde Fashola, recently declared that the government would not provide any financial support to power firms.

He said the Federal Government had earlier provided N213bn as subsidy to operators in the sector and would not do that anymore.

“Subsidy appears in different forms. When I resumed in this sector, I was made to understand there was an existing CBN fund for the market. The CBN fund comes at a low interest rate; if that does not qualify as subsidy, then I don’t know what else qualifies,” Fashola had said.

Reacting to the development, a former President of the Association of National Accountants of Nigeria, Dr. Samuel Nzekwe, told our correspondent that instead of listening to repeated complaints by the power firms, the government should review the privatisation of the sector.

He said, “For how long are we going to continue like this? If the companies cannot deliver, why not review the privatisation exercise? The National Assembly highlighted this issue recently when it stated that the power firms had failed Nigerians. They come with high estimated bills even when there is no power supply and still complain that people don’t pay electricity bills.

“I understand why the government doesn’t want to revisit the issue of privatisation; it is about how investors will see Nigeria. But are we going to continue like this? I think something needs to be done to salvage the situation and improve power supply to enhance industrialisation in Nigeria.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024

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The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

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IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%

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Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

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South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty

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South Africa's economy - Investors King

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.

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