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Fashola Raises Hope for Better Electricity Supply

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The Minister of Power, Works and Housing, Babatunde Fashola
  • Fashola Raises Hope for Better Electricity Supply

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, on Sunday raised hope for improved electricity supply in the country, assuring Nigerians that power generation would ramp up to 4,000 megawatts within the next six days.

The minister spoke on the Sunday Morning Show of Arise Television, asserting that: “In six days’ time, we will restore generation to 4,000MW,” promising: “By the time you have the hydro station back during the raining season, you will get more.”

Nigerians had been experiencing frequent power outages, which worsened in the last few weeks even as the weather became hotter, provoking bitter complaints from citizens.

But the minister, who also clarified that the N701 billion power intervention fund recently announced by the federal government would be spread over the next three years to give comfort to the operators, explained that the outages were due to low water levels at the nation’s hydro power stations.

As a result, he said, power generation had gone down to 3,400MW.

“For the first time in a long time, this is the peak of very hot weather where the waters in the hydro plants are down,” he said.

The problem, he stated, was compounded by the shutting down of two power stations on Saturday, assuring Nigerians, however, that government was determined to average generation at 3,400MW.

“Two of our plants are down; they are trying to evacuate the condensates. We are, however, keeping power generation at about 3,400MW,” he said, expressing hope that with the advent of the rain season and restoration of the hydro stations, generation would be ramped up to 4,000MW.

Fashola charged gas suppliers and generating companies to do more to produce power since the government had firmed its debt payment plan.

Restating the federal government’s commitment to pay debts owed distribution companies by the ministries, departments and agencies (MDAs), he said he would not make a recommendation to government to pay any kobo of tax payers’ money for any debt that was not properly verified.

He said: “For debts, one of the earliest statements I made was that we will pay all the debts once they are verified and the process of verification is taking place. Right now, we are looking at over 250,000 invoices comprising of I think 4,000 accounts. I won’t make a recommendation to government to pay any kobo of tax payers’ money for a debt I cannot put my signature to.

“And so I have a team doing that, we are making good progress and raising questions. That is how debts are going to be settled, we will pay every debt that is owed and verified.”

The minister also spoke on the President Muhammadu Buhari administration’s economic blueprint and said when properly implemented, it would protect Nigeria from future fall in prices of crude oil.

Fashola noted that five out of the 60 interventions plans under the Economic Recovery and Growth Programme (ERGP) launched last week by President Buhari were related to power supply, stressing that with the private sector controlling the power sector, the role of the government now was policy and coordination, and creating enabling business environment for the investors to deliver.

According to him, the government has the responsibility to ensure that the environment is right.

He said the government had promised to deliver 4000MW of electricity, adding that it was on that basis that the tariff was defined.

He, however, added that the government could not achieve that because of vandalism, which according to him, was the business of government and not that of the operators.

He said: “You see the vice-president and the president are trying to restore calm in the Niger Delta and in the last one month there hasn’t been any major announcement of any vandalism. And so we are now in a state of repairs because hitherto what happened was immediately we repaired, they were broken again. I have meetings with all the operators in the sector, we are meeting in Osogbo tomorrow and that is where the National Control Centre is, and that is part of what I am doing to know the asset by name and not just on papers.”

Fashola said the country was beginning to see the need to generate more power with solar energy and also revive coal because all of the other sources of energy were also subject to their own inherent weaknesses.

“When it is raining, solar is not very efficient and that is when you should go to gas. When it is not raining, your hydro is not good and that is where you should be able to go to coal. This is what needs to be done, but I assure you that it would be done, we will get it right,” he said.
Explaining the federal government’s cross-cutting project development that is devoid of party lines sentiments, Fashola stated that Buhari was not playing politics as elections had been won and lost.

He noted that the president was personally driving the biggest power project in Nigeria, the Mambilla Power Project, which is located in Taraba State, a non-APC state.

According to him, the president is driving the conclusion of the negotiations on the back of his visit to China, stressing that the federal government is close to concluding the negotiations and to start work late this year or early next year.

“President Buhari is not playing politics, he is governing, that is the mandate he has now and so are we his ministers,” he said.

Fashola claimed that when he was a governor, the National Economic Council (NEC) meetings did not hold to discuss deep and very important economic issues because the last administration did not want opposition governors to raise certain questions.

“Elections are over, this is the time to govern and that is what we are doing. How could you possibly, if you talk about road, achieve interconnectivity between states? Assuming we are minded like them, you cut off Ekiti State and go and build roads in Ondo State, apart from Imo State in the South-east, essentially we didn’t win any state. But work is going on in those states,” he explained.

He argued that if all the economic programmes planned by the government were efficiently implemented, Nigeria would have enough economic firepower to withstand any new fall in oil prices in the next 10 years.

According to him, the government would through the Economic Recovery and Growth Programme (ERGP), invest in Nigerians and the local economy to begin to internally source for goods and services needed by Nigerians.

He specifically stated that in the government’s housing programme where a number of houses would be built every year on a Public Private Partnership (PPP) scheme, he had mandated that all the building materials required for the projects across the country be internally sourced, except if they were not found within the country.

He said the government had prioritised its programmes for the country’s road network, adding that roads with higher economic values are being worked on.

“As an economic intervention, our plan is to restore the roads, reduce journey times, improve travel experience and reduce the cost of goods and services so that we can move cargoes and goods across Nigeria, and that is beginning to happen. Coming into 2017, I know which roads need priority attention and how to spend the monies we have. We have toured essentially all the six geo-political regions of the country,” he said.

“When I assumed office, about 206 roads already contracted by previous administrations hadn’t been completed,” he added.

“When we started with the 206 roads, the total contract sum was N2.2 trillion and the amount that had been paid was about N700 billion. So, we were out by N1.5 trillion, and I don’t have that budget in my ministry, we had to make choices. The choices we made were based on which roads carried the heaviest traffic so we could make impact, which roads carried Nigeria’s energy need like the fuel cargoes because there must be priorities; which roads sustain lives in terms of delivering food and the food basket of Nigeria is from the Middle Nelt up north, so it is those roads that help Nigerians get on with their lives,” he explained.

On housing, the minister stated that some states had offered to contribute land for the National Housing Scheme, adding that the housing units would be built in larger quantities after the first pilots have been completed.

“We are getting lands from the states; they are choosing the location where I believe they want their housing estates to be located. The housing units must pass through tests of acceptability and affordability for the people that they would be built for, and that was why I alluded to consultations, which we spent the last year doing,” Fashola added.

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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Nigeria’s N3.3tn Power Sector Rescue Package Unveiled

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power project

President Bola Tinubu has given the green light for a comprehensive N3.3 trillion rescue package.

This ambitious initiative seeks to tackle the country’s mounting power sector debts, which have long hindered the efficiency and reliability of electricity supply across the nation.

The unveiling of this rescue package represents a pivotal moment in Nigeria’s quest for a sustainable energy future. With power outages being a recurring nightmare for both businesses and households, the need for decisive action has never been more urgent.

At the heart of the rescue package are measures aimed at settling the staggering debts accumulated within the power sector. President Tinubu has approved a phased approach to debt repayment, encompassing cash injections and promissory notes.

This strategic allocation of funds aims to provide immediate relief to power-generating companies (Gencos) and gas suppliers, while also ensuring long-term financial stability within the sector.

Chief Adebayo Adelabu, the Minister of Power, revealed details of the rescue package at the 8th Africa Energy Marketplace held in Abuja.

Speaking at the event themed, “Towards Nigeria’s Sustainable Energy Future,” Adelabu emphasized the government’s commitment to eliminating bottlenecks and fostering policy coherence within the power sector.

One of the key highlights of the rescue package is the allocation of funds from the Gas Stabilisation Fund to settle outstanding debts owed to gas suppliers.

This critical step not only addresses the immediate liquidity concerns of gas companies but also paves the way for enhanced cooperation between gas suppliers and power generators.

Furthermore, the rescue package includes provisions for addressing the legacy debts owed to power-generating companies.

By utilizing future royalties and income streams from the gas sub-sector, the government aims to provide a sustainable solution that incentivizes investment in power generation capacity.

The announcement of the N3.3 trillion rescue package comes amidst ongoing efforts to revitalize Nigeria’s power sector.

Recent initiatives, including tariff adjustments and regulatory reforms, underscore the government’s determination to overcome longstanding challenges and enhance the sector’s effectiveness.

However, challenges persist, as highlighted by Barth Nnaji, a former Minister of Power, who emphasized the need for a robust transmission network to support increased power generation.

Nnaji’s advocacy for a super grid underscores the importance of infrastructure development in ensuring the reliability and stability of Nigeria’s power supply.

In light of these developments, stakeholders have welcomed the unveiling of the N3.3 trillion rescue package as a decisive step towards transforming Nigeria’s power sector.

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Nigeria’s Inflation Climbs to 28-Year High at 33.69% in April

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Nigeria's Inflation Rate - Investors King

Nigeria is grappling with soaring inflation as data from the statistics agency revealed that the country’s headline inflation surged to a new 28-year high in April.

The consumer price index, which measures the inflation rate, rose to 33.69% year-on-year, up from 33.20% in March.

This surge in inflation comes amid a series of economic challenges, including subsidy cuts on petrol and electricity and twice devaluing the local naira currency by the administration of President Bola Tinubu.

The sharp rise in inflation has been a pressing concern for policymakers, leading the central bank to take measures to address the growing price pressures.

The central bank has raised interest rates twice this year, including its largest hike in around 17 years, in an attempt to contain inflationary pressures.

Governor of the Central Bank of Nigeria has indicated that interest rates will remain high for as long as necessary to bring down inflation.

The bank is set to hold another rate-setting meeting next week to review its policy stance.

A report by the National Bureau of Statistics highlighted that the food and non-alcoholic beverages category continued to be the biggest contributor to inflation in April.

Food inflation, which accounts for the bulk of the inflation basket, rose to 40.53% in annual terms, up from 40.01% in March.

In response to the economic challenges posed by soaring inflation, President Tinubu’s administration has announced a salary hike of up to 35% for civil servants to ease the pressure on government workers.

Also, to support vulnerable households, the government has restarted a direct cash transfer program and distributed at least 42,000 tons of grains such as corn and millet.

The rising inflation rate presents significant challenges for Nigeria’s economy, impacting the purchasing power of consumers and adding strains to household budgets.

As the government continues to grapple with inflationary pressures, policymakers are faced with the task of implementing measures to stabilize prices and mitigate the adverse effects on the economy and livelihoods of citizens.

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FG Acknowledges Labour’s Protest, Assures Continued Dialogue

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Power - Investors King

The Federal Government through the Ministry of Power has acknowledged the organised Labour request for a reduction in electric tariff.

The Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) had picketed offices of the National Electricity Regulatory Commission (NERC) and Distribution Companies nationwide over the hike in electricity tariff.

The unions had described the upward review, demanding outright cancellation.

Addressing State House correspondents after the Federal Executive Council (FEC) meeting on Tuesday, Minister of Power, Adebayo Adelabu, said labour had the right to protest.

“We cannot stop them from organizing peaceful protest or laying down their demands. Let me make that clear. President Bola Tinubu’s administration is also a listening government.”

“We have heard their demands, we’re going to look at it, we’ll make further engagements and I believe we’re going to reach a peaceful resolution with the labor because no government can succeed without the cooperation, collaboration and partnership with the Labour unions. So we welcome the peaceful protest and I’m happy that it was not a violent protest. They’ve made their positions known and government has taken in their demands and we’re looking at it.

“But one thing that I want to state here is from the statistics of those affected by the hike in tariff, the people on the road yesterday, who embarked on the peaceful protests, more than 95% of them are not affected by the increase in the tariff of electricity. They still enjoy almost 70% government subsidy in the tariff they pay because the average costs of generating, transmitting and distributing electricity is not less than N180 today.

“A lot of them are paying below N60 so they still enjoy government’s subsidy. So when they say we should reverse the recently increased tariff, sincerely it’s not affecting them. That’s one position.

“My appeal again is that they should please not derail or distract our transformation plan for the industry. We have a clearly documented reform roadmap to take us to our desired destination, where we’re going to have reliable, functional, cost-effective and affordable electricity in Nigeria. It cannot be achieved overnight because this is a decay of almost 60 years, which we are trying to correct.”

He said there was the need for sacrifice from everybody, “from the government’s side, from the people’s side, from the private sector side. So we must bear this sacrifice for us to have a permanent gain”.

“I don’t want us to go back to the situation we were in February and March, where we had very low generation. We all felt the impact of this whereby electricity supply was very low and every household, every company, every institution, felt it. From the little reform that we’ve embarked upon since the beginning of April, we have seen the impact that electricity has improved and it can only get better.”

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