Economy

Sell Discos to New Investors, Elumelu Tells FG

Published

7 years ago

October 11, 2017

Sell Discos to New Investors, Elumelu Tells FG

The Chairman, United Bank for Africa Plc and Transnational Corporation Plc, Mr. Tony Elumelu, has asked the Federal Government to take another look at the power sector by wresting ownership from incompetent private operators and sell the firms to new owners who are capable of successfully running them.

He made the call in Abuja on Tuesday at the ongoing 23rd Nigerian Economic Summit.

Elumelu stated that in as much as some existing investors might not like the idea, the government could not continue to allow the electricity distribution companies to hold the nation down with inefficient power distribution.

He called for the recapitalisation of the firms and asked the Federal Government to increase its stake from the current 49 per cent and sell the controlling shares in each of the Discos to new investors, adding that the current operators had become obstacles to the realisation of the nation’s power capacity goal.

Elumelu stated, “Our people are very enterprising and they want to succeed. But they need the right environment to succeed. I appreciate what the government is doing for electricity, but we need to do more.

“I empathise with the government on its efforts in that sector. But Mr. Vice President, I think there is a lot we can do to correct the ownership of that sector without affecting the property rights of the investors. That sector must be dealt with for us to have power to do business.”

Despite the over N700bn already provided by the government for the power sector, Elumelu stated that the amount would be exhausted in a few months’ time, adding, “The market should be able to sustain itself. This is what I think. The government has to take actions that will ensure the adequate funding of the operations of the Discos.

“Mr. VP, I know some of the operators in this sector will not like this. This is my idea. We cannot reverse what has been done, but we can creatively address what has been done.

“If the government, to my understanding, has 49 per cent of the Discos and the private companies have 51 per cent, can we ask these companies to recapitalise? Let the Federal Government recapitalise them. They will not be able to put in more capital. So, the Federal Government, through the Federal Ministry of Finance Incorporated, should increase its holding.”

He added, “Then post recapitalisation, the Federal Government sells its controlling shares to new investors who have the financial wherewithal to properly finance the operations of the Discos. This is important because in a situation where the current operators don’t have the funds to run them, if the Federal Government wants to sell its shares in the Discos, investors who should have brought in their capital won’t come in if the controlling shares continue to remain with the current operators.

“When this is done, then we can have new investors who can come in and run the Discos efficiently. It doesn’t matter where they come from, but they should be investors who have the financial capacity and tested expertise to manage the distribution segment of the sector in such a way that they can deliver effective services.”

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Economy

World Bank VP Lauds CBN Governor Cardoso’s Inflation-Fighting Policies

Published

2 days ago

October 16, 2024

Bassey Marshall

The Senior Vice President of the World Bank, Indermit Gill, has praised the Governor of the Central Bank of Nigeria, Yemi Cardoso, over his approach to managing inflation in the country.

Gill made this known during his address at the 30th Nigerian Economic Summit organized by the Nigerian Economic Summit Group in Abuja, on Monday.

The World Bank VP decried the high cost of petrol occasioned by the subsidy removal of President Tinubu’s government and the untold hardship it has imposed on Nigerians.

However, he hailed the interest rate increase by the central bank which according to him will boost confidence in the Naira and anchor inflationary expectations.

Gill emphasized that Governor Cardoso through his policies has been steering Nigeria in the right direction.

Meanwhile, Gill noted that Nigeria is just in the beginning stage of reaping the benefits of these policies.

According to him, the country will need to sustain the momentum for a period of ten to seventeen years, before achieving the desired outcome.

He revealed that countries like India, Poland, Korea, and Norway have benefitted from the approach.

He said, “Implementing such a far-reaching reform is impossible without a solid political commitment from the top. The price of PMS has quadrupled since the subsidy cut, imposing terrible hardship across the breadth of Nigeria’s society.

“The Central Bank has had to hike its policy by a huge 850 basis point, almost 9 percentage points in the last month to boost confidence in the naira and anchor inflationary expectations.

“The Central Bank financing of fiscal deficit has finally ended, and Governor Cardoso has been putting Nigeria or helping to put Nigeria on the right course.”

“But this is only the beginning, Nigeria will need to stay the course for at least 10 to 17 years to transform its economy. If it does that, it will transform its economy.

“And it will become an engine of growth in Sub-Saharan Africa. And he will help to transform Sub-Saharan Africa. It’s very difficult to do these things, but the rewards are massive.

“This is the lesson from the last forty years as well as the experience of countries such as India, Poland, Korea and Norway,” Gill said.

Investors King reported that on September 24, 2024, the apex bank announced another increase in its Monetary Policy Rate (MPR) to 27.25% from 26.75 percent.

The decision was made during the Monetary Policy Committee (MPC) meeting chaired by CBN Governor, Yemi Cardoso.

Economy

Sanwo-Olu Unveils Lagos Red Line Rail For Commercial Operations

Published

2 days ago

October 16, 2024

Ugwoke Ogbodo

The Governor of Lagos State, Babajide Sanwo-Olu, has officially unveiled the LMRT Red Line for commercial operations.

The governor said the Red Line is the second rail system to become operational in less than two years in the state.

The 27-kilometre Red Line has eight stations at Oyingbo, Yaba, Mushin, Oshodi, Ikeja, Agege, Iju, and Agbado.

The train service is projected to transport about 500,000 Lagosians daily as the schedule is increased, providing a viable means of commuting.

In a post on his verified social media handles on Tuesday, Sanwo-Olu warned against vandalisation of the project, saying his government wouldn’t tolerate the destruction of public property.

Sanwo-Olu wrote, “Dear Lagosians, today marks the launch of commercial operations of the LMRT Red Line, commencing passenger services from Agbado to Oyingbo.

“We’re on a mission to keep Lagos moving, and the Red Line is a key part of our vision to create a seamlessly connected city. It is also our second rail system to become operational in less than two years.

“Spanning 27, the Red Line has eight stations at Oyingbo, Yaba, Mushin, Oshodi, Ikeja, Agege, Iju, and Agbado. The train service is projected to transport about 500,000 Lagosians daily as we ramp up the schedule and provide a viable means of commuting.”

He added that daily passenger services will depart from Agbado at 6:00 AM, with the second train leaving Iju Station at 7:30 AM.

“Ensure you have your Cowry Card ready to board,” he noted.

He urged residents to treat the project with the respect it deserves, stressing that “vandalism or disruptions will not be tolerated.”

He said, “Together, we can ensure that our trains remain a safe and enjoyable experience for everyone.”

Economy

Nationwide Blackout as National Grid Partially Collapses, Akwa Ibom Power Supply Remains Unaffected

Published

2 days ago

October 15, 2024

Yetunde Olugbenga

A partial collapse of the national grid has been reported by electricity distribution companies, resulting in a blackout in most parts of the country.

However, the Akwa Ibom Generating Station was “islanded,” allowing it to continue supplying electricity to neighboring cities.

The spokesperson for the Transmission Company of Nigeria (TCN), Ndidi Mbah, disclosed this during a chat on Monday evening.

Mbah explained that the Akwa Ibom Generating Station was “islanded” to enable continuous power supply through the Eket, Ekim, Uyo, and Itu 132-kilovolt substations.

“The entire system did not collapse, as the IBOM Generating Station was islanded (i.e., separated to stand alone and continue supplying some areas to avoid a total system failure), allowing it to supply electricity through the Eket, Ekim, Uyo, and Itu 132kV substations,” she said.

Mbah further disclosed that the collapsed national grid was partial as TCN has begun system recovery to restore normalcy in the affected area.

“Recovery is currently ongoing and has advanced significantly.” She said.

Mbah’s disclosure about the Akwa Ibom generating station being “islanded” came shortly after Emeka Ezeh, Head of Corporate Communications at the Enugu Electricity Distribution Company (EEDC), confirmed the national grid’s collapse around 6:48 p.m. on Monday.

“…of a general system collapse that occurred at 18:48 hours today, 14th October 2024.” He stated.

Speaking about how to restore power, a statement signed by Ezeh revealed that the EEDC is on standby to restore supply from Osogbo.

“We are on standby awaiting detailed information of the collapse and restoration of supply from the National Control Centre (NCC), Osogbo,” the statement read.

“Rest assured, we are working with the relevant stakeholders to restore power as soon as the grid is stabilised. Thank you for your understanding”, the statement indicated.

The Abuja Disco also reported the grid collapse at 6:58 p.m.

“Dear Valued Customer, Please be informed that the power outage being experienced is due to a system failure from the national grid at 6:58 pm today, affecting the power supply to our franchise areas”, the Abuja Disco declared.

It was reported that the collapsed electricity grid has vehemently thrown the nation into a blackout. Moreover, at the time of this report, power supply is yet to be restored across parts of the country.