Connect with us

Economy

Nigeria’s Electricity Market on Sickbed —TCN

Published

on

Electricity
  • Nigeria’s Electricity Market on Sickbed —TCN

Nigeria’s electricity market has been nose-diving since the distribution and generation arms of the sector were privatised in 2013 and is currently on a sick bed, the Transmission Company of Nigeria has said.

According to TCN, the sick state of the power market was because participants, particularly power distribution companies, hardly complied with stipulated rules of engagement.

In a recorded interview in response to an inquiry by our correspondent in Abuja, the Market Operator, Mr. Edmund Eje, stated that the power market was currently seeking sustainability.

He, however, stated that the transmission company had resolved to enforce the market rules which it had powers to enforce in order to forestall an eventual collapse of the power sector.

Eje said, “Seeing how the market is nose-diving you can see that the market is almost on a sick bed, seeking for sustainability, stability, transparency and all that. Now the question is: what would we like to opt for?

“Is it cancellation of the privatisation or do we apply the laws we believe that when they work the market continues? And that’s what the Market Operator of TCN has resorted to doing starting from June this year.”

He explained that why some power distributors were suspended by the TCN recently was because the firms defaulted in renewing their security deposits/guarantees and that this would have crippled the activities of TCN and the sector if it was not checked.

Last week, The PUNCH reported that the Federal Government reconnected Enugu, Eko and Ikeja power distribution companies to the national grid and lifted the suspension it slammed on the power firms after the Discos paid the stipulated fines attached to the infractions they committed, as well as fixed the deficiencies in their respective systems.

In the interview, Eje said, “You can’t believe that because we’ve not been having access to their security deposits, most of the market participants never deemed it fit to revamp, renew and even to know when their security deposits expires.

“And when deposits expire, it means that they are no longer secured in the market and the entire market is also at risk. It is not about the Disco, it is not about Market Operations or TCN, but the sustenance of the Nigerian electricity market.”

He added, “Every other developed clime where you hear that it is working, it is mainly because the rules are obeyed. If it is working in the United Kingdom, it is because the practitioners comply with the rules that control the market.

“Today, we want to do our own part as Market Operator; we want to make sure that we enforce the rules. We want to make sure that any person who has signed an agreement with us complies with the tenets of that agreement and that’s what we are trying to do right now.”

He noted that after the disconnection of Discos by TCN, the transmission firm started receiving commendations as other market participants noted that the move was a good way to help manage the market.

Eje said, “I tell you that since this started, we have been receiving commendations and if only the market will be sustained through this, then it will be good for the Nigerian electricity market. That’s what we are doing.

“The far reaching implication is that if the Discos do what they are supposed to do, you will see that the market itself is going to stabilise. The common person who can also afford his bill will likewise pay his bill.

“But the important thing is that at any time or most of the times you turn on your switch there will be light.”

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

NNPC To Resume Oil Exploration In Sokoto Basin

Published

on

NNPC

The Nigerian National Petroleum Corporation on Thursday announced plans to resume active oil exploration in Sokoto Basin.

A statement issued in Abuja on Thursday by NNPC spokesperson, Kennie Obateru, said the corporation’s Group Managing Director, Mele Kyari, said exploration for crude would resume in the Sokoto Basin.

The statement read in part, “Kyari also hinted of plans for the corporation to resume active exploration activities in the Sokoto Basin.”

The NNPC boss disclosed this while receiving the Governor of Kebbi State, Atiku Bagudu, who paid Kyari a courtesy visit in his office on Thursday.

In October 2019, the President, Major General Muhammadu Buhari (retd.), had during the spud-in ceremony of Kolmani River II Well on the Upper Benue Trough, Gongola Basin, in the North-East, said the government would explore for oil and gas in the frontier basins across the country.

He outlined the basins to include the Benue Trough, Chad Basin, Sokoto and Bida Basins.

Buhari had also stated that attention would be given to the Dahomey and Anambra Basins which had already witnessed oil and gas discoveries.

Kyari restated NNPC’s commitment to the partnership with Kebbi State for the production of biofuels, describing the project as viable and in tandem with the global transition to renewable energy.

He said the rice production programme in the state was a definite boost to the biofuels project.

Kyari said the linkage of the agricultural sector with the energy sector would facilitate economic growth and bring prosperity to the citizens.

He was quoted as saying, “We will go ahead and renew the Memorandum of Understanding and bring in any necessary amendment that is required to make this business run faster.”

The Kebbi State governor expressed appreciation to the NNPC for its cooperation on the biofuel project.

Bagudu said the cassava programme was well on course but the same could not be said of the sugarcane programme as the targeted milestone was yet to be attained.

Kebbi state is one of the states that the NNPC is in partnership with for the development of renewable energy.

Continue Reading

Economy

Nigeria To Benefit As G-20 Approves Extension Of Debt Relief Till December

Published

on

Finance ministers of G-20 countries have approved an extension of debt relief for the world’s poorest nations till December 2021.

David Malpass, World Bank president, made the announcement at the virtual spring meeting, on Wednesday.

TheCable had earlier reported that the G-20 countries will meet this week to consider an extension of the debt freeze.

The G-20, is a group of finance ministers and central bank governors from 19 of the world’s largest economies, including those of many developing nations, along with the European Union.

G-20 countries had established a debt service suspension initiative (DSSI) which took effect in May 2020.

Nigeria had benefited from the initiative which delivered about $5 billion in relief to more than 40 eligible countries.

The suspension period which was originally set to end on December 31, 2020 was extended to June 2021.

Malpass said the extension to December 2021 will boost economic recovery and promote job creation in low income countries.

He urged countries to be transparent in their approach to the debt service payment extension.

“On debt, we welcome a decision by the G20 to extend the DSSI through 2021. The World Bank is also working closely with the IMF to support the implementation of the G20 Common Framework,” he said.

“In both these debt efforts, greater transparency is an important element: I urge all G20 countries to disclose the terms of their financing contracts, including rescheduling, and to support the World Bank’s efforts to reconcile borrower’s debt data more fully with that of creditors.

“Participation by commercial creditors and fuller participation by official bilateral creditors will be vital. I urge all G20 countries to instruct and create incentives for all their public bilateral creditors to participate in debt relief efforts, including national policy banks. I also urge G20 countries to act decisively to incentivize the private creditors under their jurisdiction to participate fully in sovereign debt relief efforts for low-income countries.

“Debt relief efforts are providing some welcome fiscal space, but IDA countries need major new resources too, including grants and highly concessional resources. From April to December 2020, the first DSSI period, our net transfers to IDA and LDC countries were close to $17 billion, of which $5.8 billion were on grant terms.

“Our new commitments were almost $30 billion, making IDA19 the single largest source of concessional resources for the poorest countries and the key multilateral platform for support. To recover from COVID, much more is needed, and we welcome the G20’s support for advancing IDA20 by one year.”

Continue Reading

Economy

IMF / Fiscal Monitor Report April 2021 Forecast

Published

on

IMF 1

Unprecedented fiscal support by governments during the pandemic has prevented more severe economic contractions and larger job losses, but risks remain of long-term scarring the International Monetary Fund says in its Fiscal Monitor report released on Wednesday (April 7) in Washington, DC.

Meanwhile, such support, along with drops in revenues, has raised government deficits and debt to unprecedented levels across all country income groups, said Vitor Gaspar, Director of the Fiscal Affairs Department at the IMF.

The first lesson one year into COVID-19 is that fiscal policy can act timely and decisively. The fiscal policy response was unprecedented in speed and size looking across countries. We also learned that countries with easier access to finance or stronger buffers were able to give more fiscal support. They’re also projected to recover faster,” said Gaspar.

Average overall deficits as a share of GDP in 2020 reached 11.7 percent for advanced economies, 9.8 percent for emerging market economies, and 5.5 percent for low-income developing countries. Countries’ ability to scale up spending has diverged.

“So, what have we learned? We’ve learned that fiscal policy is powerful and that sound public finances are crucial in order to enable that power to be used to the fullest,” stressed Gaspar.

Gaspar urged policy makers to balance the risks from large and growing public and private debt with the risks from premature withdrawal of fiscal support, which could slow the recovery.

“In the spring 2021, we emphasize differentiation across countries. Moreover, COVID-19 is fast evolving, as are the consequences from COVID-19. The fiscal policy must stay agile and flexible to respond to this fast-evolving situation.” Said Gaspar.

He also warned that the targeting of measures must be improved and tailored to countries’ administrative capacity so that fiscal support can be maintained for the duration of the crisis—considering an uncertain and uneven recovery

“Moreover, countries are very different in their structures, in their institutions, in their financial capacity and much else. Therefore, policies and policy advice have to be tailored to fit.” Said Gaspar

Gaspar concluded his remarks by emphasizing that global vaccination is urgently needed, and that global inoculation would pay for itself with stronger employment and economic activity, leading to increased tax revenues and sizable savings in fiscal support.

“A fair shot, a vaccination for everybody in the world may well be the highest return global investment ever. But the Fiscal Monitor also emphasizes the importance of giving a fair shot at life success for everyone. It documents that preexisting inequalities made COVID-19 worse and that COVID-19 in turn made inequalities worse. There is here a vicious cycle that threatens trust and social cohesion. Therefore, we recommend stronger redistributive policies and universal access to basic public services like health, education, and social security,” said Gaspar.

Continue Reading

Trending