- Power Sector Requires $7.5 Billion to be Viable
The Federal Government has said about $7.5 billion funding is needed for the power sector over the next five years, starting from this year till 2021, to make it viable. If achieved, the funding, which is $1.5 billion per year, would enable diversification of the economy and is estimated to drive growth by at least $29.3 billion annually.
The government, which revealed this in the Draft Final copy of the Power Sector Recovery Programme (PSRP) obtained, noted that the sector’s viability would, however, be depended on taking the steps outlined in the plan.
Stating that the power market recorded shortfall of about N473 billion in 2015 and 2016 with tariff shortfall at approximately N458 billion, the 55-page document noted that, at the current tariff level, even with zero collection losses, the sector shortfall was inevitable. “It is therefore paramount that government provides a subsidy (or similar mechanism) to offset the expected shortfall,” the programme suggested, pointing out that, “the longer it takes to increase tariffs, the larger the market shortfall grows.”
According to the document, “ The Tariff Shortfall is due to changes in macro-economic variables, volumetric shock in energy supplied and the costs of interest on non-financed shortfalls via retail tariff sculpting. This has resulted in a shortfall of N458 billion due to Discos from Customers. The market shortfall is due to non-payment of actual MO (market operator) and NBETs invoices by the Discos. This has created a shortfall of N473 billion due from Discos to the market.”
Acknowledging that, “The sector is in transition from government to private-sector owned and operated,” the PSRP stated that, it was therefore, “facing liquidity challenges arising from consumers’ orientation to pay only for what they use, transitional learning, regulatory compliance, forex rate changes and vandalism of power assets that affect production stability and breeds consumer resistance to payments.”
As part of government’s effort to gather financial support for the power sector, the Federal Executive Council, earlier in the year, approved discussions with the World Bank with a view to securing $2.5 billion for the sector. Consequently, the Bretton Woods institution expressed willingness to assist with the financing and two of its arms- International Finance Corporation(IFC) and Multilateral Investment Guaranty Agency (MIGA)- has indicated interest to provide an additional US$2.7 billion for private investment.
Giving a breakdown of the $2.7 billion World Bank support, the PSRP revealed that, $1 billion is a performance-based loan for financial support to eliminate cash flow deficits; $500 million for loss reduction in distribution including metering and $364 million would be used as a support to Transmission Company of Nigeria to finance its priority projects.
While $350 million is a potential funding for rural electrification initiatives, $305 would serve as guarantees.
For the IFC investment, $1.3 billion is being expected as a direct investment and mobilisation for power sector for additional 3.5 gigawatts (GW) of power generation as well as investments in distribution companies. The remaining $1.4 billion to be provided by MIGA is planned as guarantees for both gas and solar IPPs.
In its introductory note, the PSRP document stated that the recovery programme was developed in view of the urgent need to address the dire challenges within the Nigerian Electricity Supply Industry (NESI).
In stating the challenge, the document lamented that, from being an investment destination sought after in 2013 – both at home and abroad, the NESI had fallen out of favour.
“With the recent meetings in Abuja of the DFI/MDBs over issues concerning the currency redenomination of the Put-Call Option Agreement (PCOA), there now remains only 2 dependable sources of financing for the NESI: NGN – The Central Bank of Nigeria (CBN) USD – The World Bank Group (WBG).
“A bold turnaround plan is now required to utilise current assets and resources optimally, and to restore investor confidence in the sector, required to deliver the planned sector reforms,” it stated.
As such, the key objectives of the PSRP are: “To improve power supply reliability to meet growing demand; to strengthen the sector’s institutional framework and increase transparency; to implement clear policies that promote and encourage investor confidence in the sector; and to establish a contract-based electricity market.”
To this end, the document highlighted the key deliverables as: “Dimensioning accumulated deficit (2015, 2016) and future shortfall (2017-2021); Developing mechanisms for settlement of accumulated debt; Developing interventions to minimise subsidy going forward; Restoring sector financial viability; Ensuring Disco loss reductions; Identifying funding sources; Addressing infrastructure gaps; Addressing gas pipeline vandalism; Enabling electricity market business continuity; Developing a communications strategy for stakeholders.”
India, Spain, the Netherlands, USA, Nigeria’s Major Export Markets -NBS
India, Spain and the Netherland top Nigeria’s export markets in the final quarter of 2020, according to the latest data from the National Bureau of Statistics (NBS).
The Commodity Price Indices and Terms of Trade Q4 2020 report showed that the United States and China trailed the three.
However, the NBS revealed Nigeria exports mainly crude oil and natural gas during the period under review.
It, “The major export and import market of Nigeria in Q4 2020 were India, Spain, the Netherlands, United States and China.
“The major export to these countries were crude petroleum and natural gas. The major imports from the countries were motor spirits, used vehicles, motorcycles and antibiotics.”
The bureau stated that the all-commodity group import index increased by 0.13 per cent between October and December 2020.
“This was driven mainly by an increase in the prices of base metals and articles of base metals (one per cent), boilers, machinery and appliances; parts thereof (1.03 per cent), and products of the chemical and allied industries (0.75 per cent),” it stated.
The NBS, however, noted that the index was negatively affected by animal and vegetable fats and oils and other cleavage products.
Onyeama: Qatar To Invest $5bn In Nigeria’s Economy
The oil-rich state of Qatar is to invest a total of $5 billion in Nigeria’s economy, the Foreign Affairs Minister, Godfrey Onyeama, has disclosed.
Onyeama, who spoke Sunday at a send forth dinner in honour of Nigeria’s Ambassador-designate to the State of Qatar, who is also the outgoing Director of Protocol (DOP) at the State House, Ambassador Yakubu Ahmed, also stated that recent career ambassadorial appointments made by the gederal government was based on merit, experience and professionalism.
The minister further said there had been discussions with Qatar on partnership with Nigeria’s Sovereign Wealth Fund (SWF), for significant investments in the region of $5 billion in the Nigerian economy.
According to him, ‘‘Qatar is a weighty and strategic country and very strategic in that part of the world and we are putting our best feet forward to advance the interest of our country economically and in other areas.”
He recalled that President Muhammadu Buhari had visited the State of Qatar in 2016 and the Emir of Qatar, Tamim Bin Hammad Al-Thani, reciprocated with a State visit in 2019.
Onyeama also explained that only trusted hands with a track record of diligence, experience and professionalism in the Foreign Service were recently appointed career ambassadors by the federal government.
The minister said the appointment of Ahmed and other career ambassadors were predicated on posting dedicated and keen Foreign Service practitioners to serve as image makers of the country.
He said: ‘‘Ambassador Yakubu Ahmed is a dedicated professional with a penchant for rigour and detail. He is very capable and one of the best in the Ministry of Foreign Affairs. He is personable, affable, extremely friendly, dispassionate and objective.
‘‘He is going to head a very important mission, a very important country, reckoned to be one of the richest countries in the world, per capita, and there’s a lot we will be doing with the State of Qatar.”
Also speaking, the Deputy Chief of Staff, Adeola Rahman Ipaye, described the honoree as a ‘‘perfect gentleman, very even-natured and always well turned out’’.
Ipaye said he had no doubt that the newly appointed ambassador would serve the country well in Qatar, adding that: ‘‘We are further encouraged that when he completes this assignment, he would return to serve Nigeria in a higher capacity.’’
In his remarks, the Permanent Secretary, State House, Tijjani Umar, while congratulating the outgoing DOP on his appointment, lauded Ahmed for excellent service to the State House and the nation.
‘‘He served this institution and the nation with the deepest sense of responsibility and it is very important that we establish a tradition where the system appreciates those who have served it well and those who will continue to serve it well,’’ he said.
Umar urged the new envoy to keep very fond memories of his time at the Presidential Villa, assuring him of the prayers and goodwill of all the staff.
Responding, Ahmed thanked President Buhari for the great honour and privilege of making him his principal representative in Doha, Qatar.
The Ambassador-designate pledged to deplore his energy and skill to the promotion of the existing cordial relationship between Nigeria and Qatar, particularly in the areas of economic, political, cultural and consular affairs as well as other key areas.
Ahmed, who joined Nigeria’s Foreign Service in 1993, said during his years in public service he had learnt that ‘‘patriotism, selfless service, diligence, determination and perseverance will always result in the achievement of the desired objective’’.
According to him, these virtues would be his ‘‘watchword’’ in the pursuit of Nigeria’s foreign policy objectives and the attainment of national interests.
The Ambassador-designate singled out for appreciation the Chief of Staff to the President, Prof. Ibrahim Gambari, and the state Chief of Protocol, Ambassador Lawal Kazaure, saying he had learnt a lot working under their mentorship.
He expressed gratitude to the Minister of Foreign Affairs and the Permanent Secretary, State House for giving him the opportunity of a memorable work experience in the State House.
France, Nigeria to Build New Partnership
France is currently aiming at building a new partnership with Nigeria, with the dispatching of its Minister in charge of Foreign Trade and Attractiveness, Franck Riester, to Nigeria.
Riester, who was expected at the time of filing this report on Monday, is scheduled to visit Nigeria from 12-14 April, 2021.
A statement from the French Embassy in Nigeria said: “Franck Riester is visiting Nigeria from 12 to 14 April, a visit that follows up on the priorities set by French President Emmanuel Macron during his official visit to Nigeria in July 2018 and his desire to build a new partnership between Africa and France.
“As the largest economy in Africa and the economic engine of West Africa, Nigeria is indeed a major partner for France, the first in sub-Saharan Africa with bilateral trade amounting to a total of 4.5 billion USD in 2019 (2.3 billion USD in 2020, due to the Covid-19 pandemic).”
It disclosed that the minister will have several official meetings in Abuja and Lagos, in order to underline the importance of the bilateral economic relationship and to prepare the summit on the financing of African economies in Paris on 18 May.
It revealed that the objective of the mission is also to further strengthen the links between the French and Nigerian private sectors, and “in this regard, the minister will have in-depth discussions with the main Nigerian economic actors to strengthen bilateral cooperation and investments, both in Nigeria and in France, particularly in the logistics sector”.
It said while in the country, the minister would meet with young Nigerian entrepreneurs in the cultural and creative industries sector, to discuss the major role of their country in African creativity and the development of the African entrepreneurial ecosystem, with the support of France.
It further said: “The minister will also open the ‘Choose Africa’ conference, a €3.5 billion initiative by President Emmanuel Macron dedicated to supporting the development of start-ups and SMEs in Africa to enable the continent to benefit fully from the opportunities of the digital revolution.”
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