- Nigeria Loses $29.3b Yearly to Erratic Power Supply
The Electricity Generation Companies (GenCos) at the weekend said the country loses $29.3billion yearly to low supply resulting from load shedding and inadequate facilities.
The Executive Secretary, Association of Power Generation Companies (APGC), Joy Ogaji, in an emailed response to questions, urged the Transmission Company of Nigeria (TCN) to upgrade its network to absorb the 8,000megawatts (Mw) capacity of the GenCos.
She said: “In urban areas where electricity access has been provided, the availability of electricity supply is drastically low, due either to load shedding or inadequate power supply facilities. It is estimated that the Nigerian economy is losing $29.3 billion annually, due to the lack of adequate power.”
Ogaji, a lawyer, also sought a strict regulation of the transmission and distribution chains of the Nigeria Electricity Supply Industry (NESI) to compel the distribution companies (DisCos) to remit the revenue they collect from their customers to the market operator.
She said: “If power output must improve, the transmission and distribution arms of the power chain must be strictly regulated. The transmission grid must be upgraded to ensure 8000Mw available capacity from GenCos is put on the grid.
“The DisCos must be strictly monitored to ensure revenue collected for electricity supplied is remitted. This is the link to infrastructure development and future investment along the power chain.”
Justifying Federal Government’s continued funding of the GenCos despite the privatisation, she said the government intervention is “because investment on generation is at the instance of the off-taker (NBET- FGN). Also because they have kept to the terms of their contract with government’’.
“GenCos, despite the stern challenges they are faced with from inception till date, have in association with the Federal Government’s objective to enhance the efficiency of the nation’s power industry as well as make energy affordable and available to consumers, kept to the terms of the industry agreements they entered into with the Bureau of Public Enterprises (BPE), which defines the relationship between the privatised companies and the government (represented by BPE and Ministry of Finance incorporated (MOFI) with a five-year period to recover lost capacities. Records from BPE shows that as at the takeover date in November 2013, available generation capacity was 4,500Mw.
“Also installed generation capacity stands at 13,496Mw as against 12,500Mw at take over. GenCos engaged on a massive capacity recovery plan with their acquired asset and achieved in no time lost capacities increasing available capacity to 7,913Mw.”
She said NESI has huge potential, but yet to demonstrate sustainable returns to investors across the electricity supply value chain.
Ogaji said cash flow within the industry is the fundamental problem preventing Nigerians from enjoying continued and sustainable improvement in electricity supply and the gains of the power sector reforms or privatisation.
She said: “The reason for this liquidity squeeze we feel in the sector is that the sector is working against the established principles of electricity supply value chain.
“The first principle being that while energy flows from the left to the right (via the fuel (gas or water) supplier to the fuel transporter (NGPTC), to the power generator (GenCos), to the power transmitter (TCN), to the power distributor (DisCos) and then to our homes or industry/commercial enterprises. The payment/money for the energy is expected to move from right to the left.
“That is, from consumers to the DisCos – statutorily empowered to collect and account for customer payments, on behalf of the value chain.
“This, unfortunately, is not happening as the GenCos are having a current market invoice shortfall of over 75 per cent. The question is: ‘which business can survive on a 25 per cent monthly invoice payment. Are Nigerians not willing or able to pay for the power generated?’ ”
Ogaji said GenCos increased available generation capability was not translated to corresponding increase in power supply to consumers, so consumers believe that the system has failed.
According to her, the privatisation of the sector had exposed the its structural weakness.
She said: “As investors, GenCos are worst hit in this electricity market logjam. They generate power and the power is consumed and not paid for. The Transition Electricity Market (TEM) regulation betrayed GenCos. Ineffective contracts as against the TEM promise; imposed quasi-PPA; constrained down and out – unrecognised demand capacity; wrongly defined available capacity.
“The above facts culminate to the understanding that whatever is on paper as an outstanding to any GenCo is less than the actual. GenCos are all casualties – a collateral damage to the economy.
“Natural justice, apart from PPA (power purchase agreement) clauses, requires that the GenCo be paid full for the declared available capacity and energy in the absence of the SO’s instruction to ramp down. Obvious commercial justification is that the GenCo has mobilised and paid for every input variable – fuel, labour and all other overhead costs – needed to produce energy as declared.
“More than four years after the establishment of NBET, what is evident to both international and local investors in the power sector is that NBET is deficient in the required capitalisation to meet its obligations.
“It also lacks the ability to provide adequate and sustainable payment securities backed by the Federal Government under PPAs. In the light of these glaring deficiencies, international organisations like the World Bank and the African Development Bank have had to create credit enhancement/payment support instruments in the form of partial risk guarantees to protect the companies.”
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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