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Five Firms Bid for Afam, Yola Power Companies

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  • Five Firms Bid for Afam, Yola Power Companies

Five firms have submitted financial and technical bids to purchase 51 per cent stake in the Afam Power Plc – an electricity generation company – and Yola Electricity Distribution Company.

Head, Public Communications at the Bureau of Public Enterprises, Amina Othman, disclosed this in a statement made available to our correspondent in Abuja on Monday.

Othman said that the five companies beat the Friday deadline set for the submission of financial and technical proposals.

She said, “A total of five bids were received by the BPE on Friday, March 15, 2019 – being the deadline for the submission of technical and financial proposals for the acquisition of the Yola Electricity Distribution Company and Afam Electricity Generation Company (Afam Power Plc & Afam Three Fast Power Limited) by prospective core-investors.

“Two firms – Quest Electricity Nigeria Limited and Sandstream Nigeria – submitted proposals to acquire the Yola Disco while DiamondStripes Consortium, Unicorn Power Generation Consortium and Transcorp Power, sought to acquire the Afam Genco.

“Sandstream submission was, however, found to be non-responsive as it failed to include a bank guarantee in line with the requirements in the Requests for Proposal.

Accordingly, the representative of the firm took the bid back.”

Speaking on the development, the Director-General of BPE, Mr Alex Okoh, assured the bidders that the evaluation of their bids would be subjected to the highest level of integrity culminating into the financial bids opening of the successful bidders.

Okoh said the Evaluation Committee would meet immediately to discuss and finalise the scoring criteria before commencing the evaluation process which was expected to end on Thursday.

A total of 19 firms had indicated interest to acquire the Afam Power Company and the Yola Distribution Company put up for sale by the Federal Government at the close of the submission of bids for the Expression of Interest at 1 pm on Tuesday, September 26, 2018.

The request for expression of interest in the two companies was published by the BPE in national newspapers on August 16, 2018, and after evaluation of the EOIs, 11 firms qualified for the next stage but only the five were successful.

The Yola Distribution Company had been successfully privatised and handed over to the core investor in 2013. However, a force majeure was declared in 2015 by the core investor citing insecurity in the North-East region of the country. Following this, the company was duly repossessed by the Federal Government.

The transaction for Afam Power Generation Company, on the other hand, fell through due to the delay in signing the Gas Supply Agreement and the Gas Transportation Agreement.

In 2017, the National Council on Privatisation gave approval for a fresh transaction to privatise the two power companies, Othman said.

It is expected that the successful bidders will be responsible for operating the generation and distribution companies, making the necessary investments to improve the generation and distribution networks and customer service in line with the objectives of the Federal Government of Nigeria set out in the National Electric Power Policy, the BPE spokesperson added.

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.

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Economy

World Bank Lauds Kogi’s 2020 Financial Statement

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The World Bank has heaped praise on the Government of Kogi State concerning the state’s audited financial statement for 2020. The financial institution was said to have described the financial report as a standard to look up to concerning transparency and accountability in the public sector.

In a statement which was dated November 21, 2021 it was said that the bank made the commendation in a letter which was sent to the Accountant General of the state.

As said in the statement, the letter which was taken by the Kogi State Accountant General on November 2025 was signed by Deborah Hannah Isser, the Task Team Leader of the States Fiscal Transparency, Accountability and Sustainability Programme (SFTAS), Nigeria Country Office, Western and Central African Region.

SFTAS is a $750 million programme which has been set up to reward states for meeting any or every one of the indicators which demonstrate improvements in fiscal transparency, sustainability and accountability.

The indicators, which are nine in number were a byproduct of the former Fiscal Sustainability Plan of the federal government where States would be rewarded for meeting up to 22 targets.

The World Bank had previously backed the federal government to give incentives to the states in order to properly execute the 22-point Fiscal Sustainability Plan, which has now gone under a revamp as the nine Disbursement Linked Indicators under SFTAS.

Some of the criteria on which judgement will be based on are: improvement in financial reporting and budget reliability, improved cash management, increased openness, citizen participation in the budget process, reduced revenue leakages through the execution of State Treasury Single Account (TSA), a strengthened Internally Generated Revenue (IGR) collection, biometric registration and Bank Verification Number (BVN) used to reduce payroll fraud.

The World Bank commended the Kogi State government for preparing its audited financial statements in line with the basis of the International Public Sector Accounting Standards.

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Economy

Nigeria’s Rigid Forex Policy Discouraging Investors, Fueling Inflation – World Bank

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The World Bank has blamed the Central Bank of Nigeria’s rigid forex policy for the drop in Nigeria’s capital importation and rising inflation rate.

The bank disclosed in its November report, Nigeria Development Update.

Explaining modalities for its position, the World Bank stated that there had been constant pressure on the Nigerian Naira with the current forex policy, forcing the central bank to consistently increase its nominal official exchange rate in an effort to ease some of the pressure.

This, it blamed on the rigid foreign exchange management system of the Central Bank of Nigeria, saying the system has also been responsible for the rising inflation rate in Nigeria.

The report read in part, “The government’s exchange rate management policies continue to discourage investment and fuel inflation. Exchange rate stability is a key CBN policy objective, and to preserve its external reserves the CBN continues to manage FX demand and limit the supply of FX to the market.

“Pressure on the naira remains intense, and while the CBN has raised the nominal official exchange rate three times since the start of the pandemic (by 15 per cent in March 2020, five per cent in August 2020, and seven per cent in May 2021), FX management remains too rigid to respond to external shocks. Meanwhile, exchange-rate management has emerged as one of the key drivers of inflation.”

The World Bank further stated that the central bank foreign exchange system needs to be more flexible to withstand external shocks, especially given Nigeria’s mono-product nature. It added that the NAFEX rate does not reflect the true market rate but the central bank managed rate.

It read in part, “While the CBN supplied an average of $2.5bn to the Investors and Exporters forex window in the months just prior to the COVID-19 crisis, it only supplied an average of $0.5bn in the months thereafter.

“The NAFEX rate, which is now the guiding exchange rate for the economy, continues to be managed and is not fully reflective of market conditions. The parallel market premium over the NAFEX rate reached 29 per cent in August 2021 after the CBN cut off its weekly supply of $20,000 per bureau de change. The CBN has intermittently supplied forex to BDCs since 2005, providing ample opportunities for currency round-tripping.”

The institution however advised that Nigeria adopt a more predictable, transparent and flexible foreign exchange management system in order to attract and sustain private investment flows.

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Nigeria’s Non-oil Revenue Now N1.15 Trillion – Minister of Finance

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Mrs. Zainab Ahmed, the Minister of Finance, Budget and National Planning, has said that Nigeria’s non-oil revenue is now N1.15 trillion, representing 15.7 percent above the country’s target. This, she claimed, was a result of the federal government’s efforts at diversifying the nation’s economy.

Mrs. Ahmed disclosed this at the Institute of Directors (IoD) 2021 Annual Directors Conference which was held on Wednesday in Abuja.

According to the News Agency of Nigeria (NAN) the event with the theme: “Creating the Future: Deepening the Corporate Governance Practice through Multi-Sectoral and Multi-Generational Collaborations,” was meant to discuss economic development.

Mrs Ahmed added that the recent development was in line with President’s commitment to further diversifying the Nigerian economy which is heavily dependent on oil. She observed that Nigeria was showing resilience in recovery from recession from coronavirus (COVID-19) pandemic which intensely affected global economies.

The minister said the federal government alongside the private sector had implemented a wide range of monetary measures to stimulate economic recovery, growth and development, job creation and improved standards of living.

She also explained that the government was doing everything to improve and diversify Nigeria’s revenue generation.

Nigeria was quickly able to exit recession and is on her way to path of sustainable growth and we are intensifying efforts to grow and diversify our revenue sources to grow revenue from the current 8 per cent.”

“Our non-oil revenues have grown to N1.15 trillion, representing 15.7 per cent above set target. We are working on the 2021 finance bill and it’s nearing completion. Also, the recent approval of the medium-term national development plan is an important milestone of Buhari’s commitment to delivering sustainable growth and we require strong support and monitoring during implementation,” she said.

Mrs Ahmed reinforced the government’s decision to do something about infrastructure and reduce the cost of production for businesses in the country.

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