The Federal Government of Nigeria is spending $1.5bn (N568.5bn at N379/$ exchange rate) annually to fund electricity tariff shortfalls, the World Bank has said.
According to the global financial institution, this amount could further increase if the country fails to take the right action.
The bank disclosed this in its enlarged report on Nigeria Power Sector Recovery Programme.
“FGN (Federal Government of Nigeria) is spending $1.5bn per year to fund tariff shortfalls and this could continue to rise if action isn’t taken,” the bank stated in the document.
The World Bank said Nigeria’s power sector was operationally inefficient with unreliable supply exacerbated by high losses and lack of payment discipline.
Picking on the various arms of the sector, the bank stated that power generation was characterised by high non-available capacity due to the fact that many plants were out on fault, damage, maintenance, major overhaul, etc.
“Gas and transmission constraints lead to non-operational capacity. Resolving policy/regulatory challenges and Disco (distribution companies) issues are key to free up stranded capacity,” the bank stated.
In the transmission sector, the bank said infrastructure in this arm of the industry remained inadequate and congested, stressing that investments in upgrades and maintenance were required.
In the power distribution arm, the bank observed that the Discos on average currently report 50 per cent Average Technical Commercial and Collection losses.
It said this was far above the less than 15 per cent international good practice and the 26 per cent that was allowed in the sector’s Multi Year Tariff Order.
The bank said, “For every ₦10 worth of electricity received by Discos, ₦2.50 was lost due to energy theft and poor distribution infrastructure.
“This reflects low investments in distribution networks and metering creating lingering liquidity challenges.”
On the policy and regulatory environment, the bank stated that there had been inconsistent implementation of tariff regulation, enforcement of market contracts, and policy direction.
It said Discos on average reported 50 per cent ATC&C losses which meant that only half of the energy generated led to collected revenue.
The bank stated that the capital expenditure allowance for all 11 Discos combined was N56bn and that this was far below what was needed.
On electricity access, the bank stated that Nigeria now had the largest number of un-electrified people globally and the trend was worsening.
It noted that of the electrified, the supply was very unreliable with widespread blackouts.
It stated that a holistic approach was necessary to address the power sector situation in a sustainable manner.
The bank, however, stated that it had proposed engagement to help address the concerns in Nigeria’s power sector.
It said the proposed engagement under two streams were aimed to provide holistic support for addressing key challenges through results-based lending.
Nigeria’s Inflation Moderates Slightly to 18.12 Percent in April 2021
Inflation in Africa’s largest economy, Nigeria, moderated from 18.17 percent year-on-year recorded in March 2021 to 18.12 percent year-on-year in the month of April 2021, according to the latest report from the National Bureau of Statistics (NBS).
On a monthly basis, inflation rose by 0.97 percent in April, down from 1.57 percent filed in March 2021.
FACAN Seeks Partnership With Lagos on Ranching
The Federation of Agricultural Commodities Association of Nigeria (FACAN) is seeking partnership with the Lagos State government on the operation of ranches as part of a road map with investment plans that seek to improve animal productivity and production, as well as increase the value addition of key livestock value chains.
Its President, Dr Victor Iyama told the media that the association is examining various aspects of agricultural development such as investment, demand, consumption, gender and social inclusion and is ready to partner with Lagos in driving out livestock-sector investment interventions, to help the state meet its targets by improving productivity and total production in the key livestock value chains of sheep and cow
According to him, the absence of a roadmap to develop the livestock sector had hindered the successful implementation of previous investment plans for the sector.
He said the creation of the master plan would guide livestock-sector investment interventions in improving feed and water resources, health services, industry and factory and promote private sector investment and business environment.
Urging the Lagos government to pursue the establishment of ranches for hire, Iyama reiterated that investors were convinced the efforts would foster public-private partnerships for livestock development.
According to him, private operators will be ready to rent ranches for meat cattle, indicating that the state remains one of the safest places for increasing industries for meat production and milk processing.
Recently, the Lagos State Butchers Association has requested the provision of about 50 hectares of land from the Lagos State Government for ranching and rearing herds of cattle in the state.
Meantime, the Lagos State Commissioner for Agriculture, Ms Absiola Olusanya, said well over 1.8 million herds of cattle and over 1.4 million herds of sheep and goats, were being consumed in Lagos yearly.
Olusanya called on the private sector to partner with it to establish feedlots in the state for cattle rearing and fattening in furtherance of its reforms and sanitization of the red meat value chain, stressing that partnership becomes necessary as it would ensure better production and supply of cattle for consumption in the state.
According to her, the feedlots when operational would help revive and resuscitate cows that might have travelled from far cities such as Sokoto, Jalingo, Bauchi and Jigawa among others where they may have come to Lagos before slaughtering them.
Olusanya added that the feedlot system would also help in fattening the cows before taking them to the slaughter slabs which would improve the quality of beef as well as help butchers and meat sellers to make more profit. “We have been having discussions around the transformation agenda centred on abattoirs, transportation and markets but there is a revised plan to have a more holistic approach to the red meat value chain.
“We are not just focusing on abattoirs alone which are a processing angle, we are starting right from the animal identification and traceability systems, meaning right from the source or point of origination of the cattle.
“That is why we want to establish feedlots in the state so that we can have cattle fattening centres. Having feedlot centres means that the cattle can rest, they can be fattening.”
Local Electronic Card Industry Will Save Nigeria About $100M Import Bill – PayPlus CEO
Nigeria may be saving about $100million annually with local manufacture of electronics card as bank cards alone gulp about $36 million.
This was disclosed by Bayo Adeokun, the Managing Director of Electronic Payplus Limited, one of the few electronic card manufacturing firms in sub-Sahara Africa.
Speaking to some media operatives last week at the backdrop of commencement of operations at its multimillion dollar new manufacturing installations, Adeokun stated: “Bank cards alone is about $36 million every year prior to our intervention. I have not done the cost of a SIM card; I have not done the cost of tax card by Lagos State government for instance and other states that are now coming up with that; I have not talked about the national ID card and I have not talked about the voter’s card. By the time you put everything together in terms of dollar, you will be talking about $100 million savings for the country.”
Calling on the Federal Government to take steps to protect investments in the card industry, he stated further: “In this period that remittances from abroad are going down, crude oil revenue is coming low and all of that the government really needs to make a lot of savings in terms of foreign reserves.”
He also harped on the employment value the industry adds to the economy saying, “Prior to this (commencement of its new production lines) Electronic Payplus had about 100 staff. Now, we are up to 150. So we are also generating employment. I mean, if you look at the nature of Nigeria, those 50 staff, each of them has a dependence, so we are talking of an additional 500 or more that we are catering for.”
Giving details of the company’s new production capacity, he said, “we can do any smart card. So the purpose is to extend it to every area of the economy. I showed you the national ID card downstairs we produce for Nigeria. So we are known to the government. Now, when the present administration came in they said there is no money to finance the production of that again. So they said they want to go into a digital ID card. We are also playing in that space because we have the license.
“We presently enrolled Nigerians in the diaspora. We do local enrollment that is currently ongoing as well. We have the license to produce that. We also are presently working with the Lagos State government because they want to roll out what is called a residency card which is also going to be a payment card. So we are going to service all the industries.
“We are also talking to telecommunication companies on the possibility of supplying their sim cards as well. Also are looking beyond Nigeria. We have customers all over Africa. All the banks in Gambia produce all their cards, for instance. We have customers in Ghana, Guinea, Cameroun, Uganda and Kenya.”
On the impact of the company’s new production facility upgrade, he said, “What we have done is 60 million production cards per annum capacity.
“But the idea is all about improved turn around that we can offer because, today if you give me an order of one million cards, I can deliver it within a week.
I can even deliver 250,000 per day to you. So we believe that that will be a game changer for us, and in addition, we are now able to scale up our capacity utilization as well as market share as quickly as possible.”
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