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Economy

Electricity Generation Falls by 1,450.8MW in Two Days

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  • Electricity Generation Falls by 1,450.8MW in Two Days

Despite the near zero rupturing of gas pipelines by vandals in the past three months, particularly in the Niger Delta, the supply of gas for power generation has remained a challenge.

This challenge was badly felt in the sector last week, as the total quantum of electricity generated by generation companies across the country crashed by 1,450.8MW within two days.

After hitting a peak of 4,553.9megawatts on Tuesday, power generation plunged to 3,103.1MW on Thursday, according to industry figures obtained by our correspondent in Abuja on Friday.

The 3,103.1MW was a far cry from what the country requires to meet its current electricity demand, as the National Control Centre put Nigeria’s peak electricity demand at 19,100MW.

The NCC, however, stated that the country’s total installed generation and available capacities were 11,165.4MW and 7,139MW, respectively.

The peak generation ever attained by Nigeria was put at 5,074.7MW, which was recorded about a year ago.

Explaining the magnitude of the gas supply challenge and how it affected power generation last week, the NCC stated that on April 29, 30, May 1 and 2, the gas constraints recorded in the sector led to the inability to generate 2,636MW; 2,181MW; 2,250MW and 2,2907MW, respectively.

“Despite improvement in gas supply due to pipeline availability, gas constraints continue to be reported as increasing,” it said.

The Minister of State for Petroleum Resources, Ibe Kachikwu, last week Tuesday announced that Nigeria witnessed no pipeline vandalism arising from militant activities in the Niger Delta in the past three months.

He stated that the near zero rupturing of pipelines in the oil rich region was mainly due to the consultations and ongoing discussions between the Federal Government and stakeholders in the Niger Delta.

Early this year, the Minister of Power, Works and Housing, Babatunde Fashola, had urged vandals to stop rupturing gas pipelines in order to ensure increased power generation as well as its supply across the country.

On why gas remained a challenge to power generation despite the improvement in pipelines availability, the Executive Secretary, Association of Power Generation Companies, an umbrella body for electricity generating firms in Nigeria, Dr. Joy Ogaji, said the inability of the Gencos to adequately pay for gas was the limiting factor.

She said, “The poor remittance of market funds by the power distribution companies has prevented the rest of the electricity value chain from meeting up with their operations and service their liabilities which include gas payments. Gencos, the supply sector of the industry, can no longer perform the required and scheduled maintenance as well as pay for gas supply.”

Ogaji stated that the Gencos as power producers bought gas to fire up their electricity generating turbines and wondered why the Discos had continually failed to make the remittances needed to run the sector effectively.

She said, “Currently, the domestic gas price approved by the Federal Government is $2.50 per mmscf and you now pay $0.80 for transportation. These things are captured inside the generation company’s tariff as the final price that we charge.

“The final price also includes the operations and maintenance cost. We produce power and send it to the grid, expecting payments from the Nigeria Bulk Electricity Trading Plc based on how the market is structured. But we only get about 30 per cent of what is due to us.”

Ogaji went on, “Can any business person survive like that? We’ve been surviving on credit and loans from our lenders and they have sent us threatening letters. The gas companies are not happy too and recently about 23 power units could not produce because we don’t have gas.

“But how can we pay for gas with so much debt on us? We have the capacity to give Nigeria up to 12,500MW of electricity, but without this money, how do we survive? Our installed power generation capacity is 8,000MW, but funds paucity is dragging us down.”

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

FIRS Sets N5.9 Trillion Revenue Target for 2021

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FIRS to Generate N5.9 Trillion Revenue  in 2021

Mohammed Nami, the Chairman of Federal Inland Revenue Service, FIRS, on Friday said the agency is projecting total revenue of N5.9 trillion for the 2021 fiscal year.

Nami stated this while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence of its proposed Revenue and Expenditure Estimates.

According to the Chairman, N4.26 trillion and N1.64 trillion were expected to come from non-oil and oil components, respectively.

However, Nami put the cost of collecting the projected revenue at N289.25 billion or 7 percent of the proposed total revenue for the year, higher than the N180.76 billion spent in 2020 to fund the three operational expenditure heads for the year.

He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive.

Speaking on while the agency failed to meet its 2020 target, Nami said “There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.

“And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.

 

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Economy

Gov Emmanuel Attracts $1.4b Fertilizer Plant to Akwa Ibom

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The Governor of Akwa Ibom State, Mr. Udom Emmanuel has signed an agreement for the citing of a multi billion fertilizer plant in his State.

Governor Emmanuel was part of a Nigerian delegation led by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that visited Morocco to set out the next steps of the $1.4 Bln fertilizer production plant project launched in June 2018.

The agreement between the OCP Africa, the Nigerian Sovereign Investment Authority and the Akwa Ibom State Government will birth one of the biggest investments in the fertilizer production industry worldwide.

The signing ceremony took place at the Mohammed VI Polytechnic University (UMP6).

Mr. Emmanuel signed one of the agreements of the partnership, which covers a memorandum of understanding between OCP Africa, the Akwa Ibom State in Nigeria and the NSIA on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.

Speaking while signing the agreement, Governor Emmanuel said, “Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality.

“With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”, Mr. Udom said.

The agreement reached between the Nigerian Government and the OCP further links OCP, Mobil Producing Nigeria (MPN), the NNPC, the Gas Aggregation Company Nigeria (GACN), and the NSIA.

The two partners agreed to strengthen further their solid partnership leveraging Nigerian gas and the Moroccan phosphate.

This project will lead to a multipurpose industrial platform in Nigeria, which will use Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and 1 million tons of phosphate fertilizers annually by 2025.

The visit of the Nigerian delegation to Morocco takes place within the frame of the partnership sealed between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry.

Following the success of the first phase of Nigeria‘s Presidential Fertilizer Initiative (PFI) and the progress of the fertilizer production plant project launched in 2018 by OCP and NSIA, the Moroccan phosphates group and the Nigerian government delegation have agreed on the next steps of their joint project which is rapidly taking shape.

Several cooperation agreements were inked on Tuesday at the Mohammed VI Polytechnic University (UM6P) by OCP Africa and the Nigerian delegation. Through these deals, OCP reaffirms its unwavering support of agricultural development initiatives in Nigeria including PFI.

OCP Africa and the NSIA have agreed, inter alia, to set up a joint venture which will oversee the development of the industrial platform that will produce ammonia and fertilizers in Nigeria.

The OCP has also pledged to supply Nigerian famers with quality fertilizers adapted to the needs of their soil at competitive prices and produced locally.

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Economy

ICPC Says Nigeria Loses $10bn to Illicit Financial Flows 

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The Independent Corrupt Practices and Other Related Offences Commission (ICPC) says Nigeria accounts for 20 per cent or 10 billion dollars (N3.8 trillion) of the estimated 50 billion dollars that Africa loses to Illicit Financial Flows (IFFs).

Chairman of ICPC, Prof. Bolaji Owasanoye, said this during a virtual meeting to review a report on IFFs in relation to tax, Mrs Azuka Ogugua, spokesperson for ICPC, said in a statement released in Abuja on Friday.

The ICPC Chairman said, “the African Union Illicit Financial Flow Report estimated that Africa is losing nearly 50 billion dollars through profit shifting by multinational corporations and about 20 per cent of this figure is from Nigeria alone.”

The ICPC boss explained that taxes played “very strategic role in the nation’s political economy.”

He said the objective of the meeting was to improve on the awareness on IFFs, especially in the areas of taxation.

The ICPC boss added that the meeting would give participants the opportunity to openly discuss how to effectively use the instrumentality of taxation to curb IFFs through risk-based approach.

“Risk-based approach, that is: monitoring and audit; due process in tax collection; structured tax amnesty framework skewed in public interest; data privacy; timely resolution of audits and payment of tax refunds and intelligence sharing among revenue generating, regulatory and law enforcement agencies,” he said.

Owasanoye also stated that for the contemporary tax man to remain relevant, he must build his capacity in areas of technology management, solution architects and an astute relationship manager.

The Executive Chairman of Federal Inland Revenue Service (FIRS) Mr Muhammad Nani, expressed concerns that IFFs posed a serious threat to the Nigerian economy as the act robbed the nation of resources that were needed for development.

Nani declared that tackling IFFs would expand the country’s tax base and improve revenue generation, which was required for development.

He consequently pushed for policy reforms that would make it difficult for “capital flights” from occurring so that the country would be placed on the path of growth.

Other discussants at the event identified weak regulatory framework, opacity of financial system and lack of capacity amongst others as some of the factors that fuelled IFFs.

The discussants emphasised the need for capacity building of relevant stakeholders as one of the ways to stamp out illicit financial flows.

They commended ICPC for leveraging its corruption prevention mandate to open a new vista in IFFs discourse in Nigeria. (NAN)

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