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FG Okays Concession of Lagos, Abuja Airports

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  • FG Okays Concession of Lagos, Abuja Airports

Vice President Yemi Osinbajo announced on Monday that the Federal Executive Council had agreed to the concession of the Murtala Muhammed Airport, Lagos and the Nnamdi Azikiwe Airport, Abuja.

Osinbajo also asked the private sector to report Ministries, Departments and Agencies of government stalling the implementation of the ease of doing business, saying naming and shaming was the only way to improve the business environment.

The vice president said these at the 5th Presidential Quarterly Business Forum in Abuja on Monday.

He said, “First, we want to do a general overhaul. Second, we want to enter into concession of the airports. I am pleased to say that the Federal Executive Council has approved the concession of the Lagos and Abuja airports,” he stated.

On naming and shaming those demanding rents and gratification, Osinbajo said, “We are ready to confront the system that is used to rent and gratification. In order to reverse that and for things to be done properly, we need to call out officials involved. If we don’t, we will never solve the problem.

“Part of the problem is that nobody is willing to report anybody asking for gratification.”

Osinbajo stated that though change was always slow, those involved in the process must remain focused.

“Change is often slow but we must remain focused. We’ve issued four executive orders so far and we’re training civil servants to implement them,” he added.

He urged regulators to see the interactions as meaning that “our work is far from being done. It is a systematic change that is required.”

The vice president, who said that government’s approach to ease of doing business in Nigeria was dynamic, delved into the current challenges confronting the power sector.

He said while the country was currently generating 6,700 megawatts of electricity, 2,000MW was being wasted daily because of problems associated with connection difficulties as well as problems between the transmission and distribution companies.

Osinbajo said the distribution companies also expressed their unwillingness to take the 2,000MW because of the unwillingness of some consumers to pay.

He also stated that part of the business overhaul initiatives of the government was to ensure the provision of power in some notable business environments such as the Ariaria Market in Aba, Abia State; the printing industry in Somolu, Lagos; and a Kano market, without the necessary connection to the national grid, describing it as “all sorts of off-grid initiatives to get power.”

He stated that the government was promoting solar power initiative as well as the construction of integrated power plants in nine universities to boost electricity supply.

While reacting to the news, stakeholders in the aviation industry said that the concession of the two airports as approved by FEC was long overdue.

The Chief Executive Officer, Centurion Aviation Security and Safety Consult, Group Capt. John Ojikutu (retd), said the development was not unexpected as the process had been ongoing since the last administration.

“We as a country have spent too much public funds on airports. The concession is long overdue so that the government can concentrate on other things,” he said.

He stated that the concession would give room for the government to focus on safety issues.

Ojikutu added, “If the MMA2 can be managed properly by a private investor and is considered one of the best in the country, then the others should be given to private investors as concessions.

“There is nothing like terminal buildings under the 18 annexes of the International Civil Aviation Organisation. It is nothing more than a shopping mall.”

Ojikutu, however, said that the concession should be limited to the terminals alone so that safety and security would not be compromised.

He explained that areas such as the runway and safety facilities like the air navigational aids should not be included in the concession agreements.

The President, Aviation Roundtable Initiative, an industry pressure group, Mr. Gbenga Olowo, said the concession would help to address some of the issues that airport users had been contending with for a long time.

Olowo, who is also the chief executive officer of Sabre Network, West Africa, said, “The concession is long awaited and I am happy it is finally happening. I hope the terms will be clear and will be respected by subsequent governments.

“The government should also take lessons from the existing concession of the MMA2 and avoid some of the mistakes made.”

The Accountable Manager of Dana Air, Mr. Obi Mbanuzuo, said it was a welcome development as airlines were in need of functional airports.

“Unfortunately, airlines have not been carried along in the process, we need more information on who is involved, the areas and aspects of the concession,” he stated.

A former Director of Operations, Nigeria Airways, Capt. Dele Ore, who was the Chairman of the Ministerial Committee on Airport Concession in 2009, said the move was long overdue, adding that the Federal Government needed not to delay the process of handing over the management of the nation’s airports to private hands.

Ore, however, advised the government to ensure that the process was transparent.

The former DC aircraft pilot said, “The advert seeking for investors must be international such that foreign investors will get to see it. Privatisation should not be the transferring of state assets to cronies of those in power.

“For the workers of the Federal Airports Authority of Nigeria, my advice to them is that they should embrace privatisation, otherwise their fate will be like those of the liquidated Nigerian Airways.’’

An aviation consultant and Chief Executive Officer of Belujane Konzult, Chris Aligbe, while welcoming the news, congratulated the Minister of State for Aviation for securing the approval.

Aligbe said, “I feel extremely happy with this development. What is left is for the concession to be done transparently.”

A former Director of Operations, IRS Airlines, Capt. Ken Wemambu, also described the development as a good move, saying nothing better could happen to the nation’s airports that had become public shame.

According to him, FAAN has not been able to manage the airports and there is a need to give them to private investors.

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

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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