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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

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

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Gas-Pipeline

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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Economy

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

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IMF global - Investors King

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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Economy

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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