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MDAs Owe DisCos N88bn Nationwide – ANED

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PHCN Power Plant

The Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors, Mr. Sunday Oduntan, said that the distribution companies were set to carry out a nationwide mass disconnection of debtor-MDAs.

According to Oduntan, as at end of April, 2016, MDAs’ debt profile stood at N88.6bn with the military being the highest with a total of N38.7bn.

The debts profile also shows that the Abuja Disco is owed N18.6bn, Benin Disco N5.8bn, Eko Disco N8.6bn, Enugu Disco N7.2bn, Ibadan Disco N6.8bn, Ikeja Disco N5. 9bn, Jos Disco N6.5bn, Kaduna Disco N8.2bn, Kano Disco, N1.2bn, Port Harcourt Disco N6.8bn and Yola Disco N2.4bn.

Similarly, federal ministries and parastatals owe N9.7bn, while state ministries and parastatals owe a total of N16.2bn debt nationwide.

With a huge N78bn debt, the Ikeja Electric Plc, an electricity distribution company, said on Thursday that the debt profile was affecting its operations.

The Head, Media Communications of the company, Mr Felix Ofulue, said that the huge debt was hindering efficient service delivery to customers in the zone.
He said, “The company’s debt profile stands at N78bn being debts owed by customers within our network.

“Out of this, the Ministries, Departments and Agencies owe over N8.9bn to date, we have designed strategies to embark on mass disconnection of all debtors.

“We have also discussed with authorities of the military, navy, police and MDAs on how to settle their debts and we have been assured of payment very soon.”

Ofulue urged consumers to pay their outstanding debts, adding that it would be difficult to sustain supply of electricity in the zone with the huge debts.

He disclosed that the company had reconnected some of the MDAs following agreed payment modalities.

On consumers who were disconnected in estates and other built-up residential areas for debts owed by the MDAs and the military, Ofule promised that the company would ensure that customers, who did not owe were not unjustly punished.

The spokesman said huge debts by some categories of consumers remained one of the major challenges in ensuring uninterrupted power supply in the country. Ikeja Electric had thrown Gowon Estate near Egbeda in Alimosho Council Area into darkness for several weeks as a result of non-payment of huge electricity bills by officers of the Armed Forces living in the estate.

The civilian population had been at the receiving end of the power cut in the estate, a situation which some residents described as unjust and worrisome.

Ofulue said, “Consumers must continue to pay for energy consumed as DISCOs pay heavily to get electricity distributed across the country; so consumers must reciprocate the gesture by paying their electricity bills promptly.

“MDAs of government are the biggest debtors and this is not helping the business of electricity distribution in the country.

“It is unfortunate that we are experiencing this situation, but that is the reality and we must face it.

“Non-payment of electricity bills is like buying “akara” (beans cake) from the seller regularly without paying. The simple implication is that such a business will not last.

“To remain in business, consumers must pay for every bit of power consumed.’’

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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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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