- Power Distributors Fail to Remit N1.16tn to NBET
Power distribution companies in the country failed to remit a total of N1.156tn to the Nigerian Bulk Electricity Trading Plc for the electricity sold to them as of February 2019.
Discos’ total debt to NBET stood at N890bn as of July 2018, according to the Ministry of Power, Works and Housing.
Latest data obtained by our correspondent from NBET on Thursday showed that the debt grew by N266.24bn within seven months (July 2018 to February 2019).
In February this year, three of the power firms, namely: Kano, Port Harcourt and Yola Discos, did not make any remittance to NBET.
The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells through vesting contracts to the Discos, which then supply it to the consumers.
According to the ministry, the current commercial structure of the industry, where NBET buys all the power from generation companies, with government guarantee, and sells it to distribution companies, with no effective guarantee of payment, was supposed to be a transitional arrangement to facilitate movement to the desired commercial structure envisaged by the Electric Power Sector Reform Act 2005.
“It is not working. It has retarded the electricity market’s development,” the ministry said in a new document, called ‘Power Sector Policy Directives and Timelines.’
It said the primary threat to the survival of the Nigerian electricity supply industry “is the persistent payment defaults originating at the retail end of the industry and the resulting unstructured and unsecured debts and non-performing bank loans.”
The ministry added, “To avert systemic failure of this vital national industry, the Federal Government’s Power Sector Recovery Programme recognises the need to provide liquidity to NBET to meet its payment obligations to Gencos, notwithstanding the Discos’ failure to meet their payment obligations to it.”
According to the document, under the current collection administration arrangements, the Discos, that collect NESI revenues, exercise unfettered discretion over the proportion of market collections they remit to Gencos (through NBET) and the TCN and other upstream market participants.
“They pay themselves first. They remit on average of below 35 per cent of the amount invoiced by NBET. This places an unfair burden on Gencos and the TCN to finance the industry’s lack of financial viability,” the ministry said.
The Nigerian Electricity Regulatory Commission recently said the challenge of poor remittance had remained a serious concern to the commission, describing it as one of the main causes of the liquidity crisis facing the industry.
NERC said while the low remittance by the Discos to NBET and the Market Operator was partly due to tariff shortfall, the Discos must improve on their technical and commercial efficiency for improvement on the payment obligation to the market, thereby improving sector liquidity.
It said, “A major initiative towards improving revenue collection in the electricity industry is the provision of meters to all registered end-use consumers of electricity
“To address the poor remittance by Discos, the commission has commenced enforcement actions against Discos found to have engaged in unacceptably low remittances to NBET and the MO, factoring in all the parameters embedded in the tariff model.”
Eat’N’Go Expands To East Africa, Projects 180 Stores By Year End
In a bid to further extend its tentacles beyond the West African market, Eat’N’Go limited, one of the leading Quick Service Restaurant (QSR) operators in Nigeria and master franchisee for world-class food brands – Domino’s Pizza, Cold Stone Creamery, and Pinkberry Gourmet Frozen Yoghurt, announced its expansion into the East African market.
This development comes after the successful acquisition of the franchisee which operated Cold Stone Creamery and Domino’s Pizza in Kenya. This acquisition will see Eat’N’Go limited become the largest Domino’s pizza and Cold Stone Creamery Master Franchisee in Africa with operations in Nigeria and Kenya.
Since its entrance to Nigeria in 2012, the QSR company has grown exponentially and has continuously nurtured the drive to extend its footprint across the African market. This acquisition provides them their first foreign market expansion, making them a Pan African company with a total number of 147 outlets across Africa and a projection to reach 180 stores by end of 2021.
Group Chief Executive Officer and Managing Director Eat’N’Go Limited, Patrick McMichael said that expanding into East Africa represents a very exciting time in the growth of the organization and also a strategic investment for the firm and its stakeholders. “Over the years, we have fostered the mission to not just bring the best QSR brands to Africa, but to directly impact on Africa’s economy and we are glad we are finally on the way to making this happen. Studying the growth of the Kenyan market in the last couple of years, we are convinced that now is the time to extend our footprint into the country.”
“We are very thrilled about this expansion as this move avails us more opportunity to provide Jobs to more Africans, especially in times like this. We remain thankful to all our customers, partners, and stakeholders who have supported us this far and we are more than ready to strengthen our dedication in satisfying the needs of our customers” Patrick added.
Eat’N’Go has over the years maintained its position as the leading food franchisee in Nigeria. As it expands its presence to other parts of Africa, the organization also places a strong focus on the quality of its products and services of all its three brands. The expansion to this new region is in line with the company’s plan to reach 180 stores across Africa by the end of 2021.
The milestone achievement and development will better position the company in its contribution to Nigeria and Africa’s economy. Currently home to over 3000 staff members across Africa, the company is committed to continuously provide job and business opportunities across the continent.
Eat’N’Go launched in 2012 in Nigeria with the vision to become the premier food operator in Africa. Today, the company has over 147 stores in Nigeria and Kenya and it continues to deliver on this promise by successfully rolling out the globally recognised brands Cold Stone Creamery and Domino’s Pizza across Africa. The company continues to expand its presence in key markets by fusing company goals with new strategic development goals and is projected to reach 180 stores across Africa by end of 2021.
Shoprite Exit: LCCI Explains Challenges Hurting Business Operations in Nigeria
Following the recent announcement of Shoprite, a leading South Africa retail giant, that it is leaving the Nigerian market due to harsh business environment and tough business policies, Dr Muda Yusuf, the Director-General, Lagos Chamber of Commerce and Industry (LCCI) has explained some of the challenges responsible for such decision despite Nigeria’s huge population size.
Yusuf said while such decision is negative for the Nigerian economy, several factors like harsh business environment could have forced the company to make such decision. He said it also could be due to intense competitive pressure.
He said, “Shoprite is an international brand with presence in 14 African countries and about 3,000 stores. The comparative analysis of returns on investment in these countries may have informed the decision to exit the Nigeria market.
“The opportunities for retail business in Nigeria is immense. But the competition in the sector is also very intense.
“There are departmental stores in practically every neighbourhood in our urban centres around the country. There is also a strong informal sector presence in the retail sector. It is a very competitive space.”
According to the Director-General, there are also important investment climate issues that constitute downside risks to big stores like Shoprite.
He said, “These include the trade policy environment, which imposes strict restrictions on imports; the regulatory environment, which is characterised by a multitude of regulators making endless demands.
“There is also the foreign exchange policy, which has made imports and remittances difficult for foreign investors. There are challenges of infrastructure which put pressures on costs and erodes profit margins.”
The LCCI boss added, “But we need to stress that Shoprite is only divesting and selling its shares; Shoprite as a brand will remain. I am sure there are many investors who will be quite delighted to take over the shares.
“It should be noted that there are other South African firms in Nigeria doing good business. We have MTN, Multichoice, Stanbic IBTC, and Standard Chartered Bank, among others. Some of them are making more money in Nigeria than in South Africa.”
He added that some sectors are more vulnerable to the challenges of the business environment than others.
Afrinvest Appoints Mrs. Onaghinon As COO
Afrinvest West Africa Limited, has appointed the former head of public private partnership agency of the Edo State, Mrs Onoise Onaghinon as its chief operating officer.
Onaghinon joined Afrinvest in 2003 as an analyst in the firm’s investment banking division, rising through the ranks to become an associate, then vice president and eventually executive director & head of investment banking.
She is a seasoned veteran in the Nigerian capital markets and investment landscape with over 18 years of experience in capital raising, mergers and acquisitions, and restructurings across many industries.
In 2017, Onaghinon took a sabbatical from the Firm to head the Public Private Partnership Agency of the Edo State Government. Having acquitted herself creditably in the public sector, she has rejoined the Firm to resume as the new COO.
Speaking on the appointment, group managing director of Afrinvest, Ike Chioke, said: “over the years, Onaghinon has demonstrated great leadership, professional excellence and outstanding client commitment in driving the firm’s business units, particularly our investment banking division. We are delighted to have her back and we look forward to leveraging her cross-disciplinary experience across the Afrinvest group”.
In her new role, Onaghinon will oversee human resources, legal & compliance, internal control and general services while leading the firm’s initiatives to improve efficiency across its subsidiaries.
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