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FG Shortlists Four Firms for Afam Power, Yola Disco’s Sale

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  • FG Shortlists Four Firms for Afam Power, Yola Disco’s Sale

The Federal Government has given its nod to three firms to proceed with the financial bids opening in the bid to acquire Afam Power Plc, an electricity generation company.

It has also given approval to one firm, Quest Electric Nigeria Limited, to proceed with financial bid opening for Yola Power Plc, an electricity distribution company covering the North-eastern part of the country.

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

According to Othman, the National Council on Privatisation chaired by the Vice-President, Prof Yemi Osinbajo, gave the approvals at its first meeting in 2019 in Abuja last week.

Another major decision taken by the council was the decision to put up Nigeria Communications Satellite Limited, operator of Nigeria’s communications satellite, for privatisation through a strategic core investor sale.

A major characteristic of the decision on Afam Power Plc is the offering of 100 per cent equity to the prospective core investor. Government had retained about 40 per cent stake in the other generation and distribution companies that were earlier sold by the government in 2013.

Othman said, “The NCP has granted approval to Diamond Stripes Consortium, Transcorp Power Consortium and Unicorn Consortium to proceed to the financial bids opening stage for the acquisition of 100 per cent shares in the Afam Electricity Generation Company (Afam Power Plc and Afam Three Fast Power Limited).

“Rising from its first Meeting for 2019, held on Friday, April 12, 2019 at the Presidential Villa, Aso Rock, Abuja, council noted that the three consortia met the benchmark score of 750 points after evaluation in accordance with the criteria set out in the Requests for Proposal.”

Other decisions taken by the Council include approval for Quest Electric Nigeria Limited to proceed to the financial bids opening stage for the reprivatisation of the Yola Electricity Distribution Company.

The council also approved the appointment of Lead Capital Consortium as Financial Adviser for the restructuring, recapitalisation and partial privatisation of the Bank of Agriculture.

It also delisted Transcorp Hilton Hotel, Abuja from post Privatisation monitoring by the BPE as well as gave approval for the appointment of Vesta Healthcare Partners as consultant to carry out a diagnostic review of the Nigerian health sector.

The privatisation of Afam Electricity Generation Company could not be concluded during the first round of the power privatisation in 2013 due to issues stemming from gas supply to the plant.

For the YEDC, although it was successfully privatised and handed over to the core investor in 2013, 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.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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