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Power Sector Needs Over $35B In Investment To Boost Power Supply – FG

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Power - Investors King

The federal government has said that there’s still a lot of financing gap in the country’s power sector, requiring an immediate funding of $30 to $40 billion in the generation, transmission and distribution value chain.

The government stated that from all sources, it expects to spend between $3 billion to $5 billion to boost power supply in the sector in the next 24 months and eventually free itself from the payment of subsidies.

Speaking during a television programme on the challenges and prospects of the power sector, Special Adviser to President Muhammadu Buhari on Infrastructure, Mr. Ahmad Zakari, noted that the sector is currently bedeviled by three major classes of challenges.

He grouped the systemic challenges as regulatory, fiscal and infrastructural, explaining that for years, Nigeria had a situation where distribution companies were buying power at high prices but were only allowed to sell at low prices by the government.

But he noted that the current administration has gone a long way to correct the inefficiency by introducing the service-based tariff despite the regulatory gap which created an investment quagmire wherein any investor who put in money wasn’t able to recover it.

Zakari further stressed that the administration has worked out how it will push more infrastructure into the network, starting from the National Mass Metering Programme (NMMP), through the emergency intervention from the central bank, commercial banks and donor partners.

This, he said, was in addition to the incremental support from Siemens and other programmes, amounting to about $3 billion actively being spent and would be spent over the next 24 months.

On the issue of grid collapses, he stated that in 2015, there were 28 total or partial collapses, while as of last year there were four , noting that in 2021, Nigeria has had one partial and one total collapse.

“There’s a plan to invest in SCADA, which is the system that digitally manages the grid. It allows you to monitor all of the figures and voltage and whenever there are challenges it can isolate the problematic segment,” he stressed.

On tariff, Zakari noted the law allows adjustment every six months, but regretted that the situation has not been fully communicated with the public even though any time it is done, it is viewed as tariff increase by the masses.

In some instances, the presidential aide noted that tariff may come down, go up or stay flat, saying that what the current administration has continued to do is subsidise electricity for the most vulnerable Nigerians.

He said the federal government has continued to encourage local meter manufacturers, who have already delivered in excess of 500,000 to 600,000 meters in phase zero of the scheme, out of which 400,000 have been installed.

He argued that the national mass metering programme has delivered more meters to Nigerians in four months than what was done in 18 months under the entire Meter Asset Provider (MAP) programme and expressed confidence that the six million metering target will be met.

Through the service-based tariff regime, Zakari noted that new grounds were being broken as the Discos collected N65 billion in December 2020, leading to a 15 per cent increase in delivery of power even before the commencement of capital expenditure.

“So, we are seeing increased liquidity in the system that is likely to continue. The Siemens programme is part of the suite of investments that make up the $3-$5 billion that we are targeting over the next 24 months,” he said.

He noted that despite the improvements, there’s still a lot of gap to be filled and massive investments to be made in the entire value chain of the power sector.

“But we have a gap in this sector in distribution and that’s over $10 billion. If you add everything together, it could be up to $30-$40 billion in terms of the other value chain sectors.

“So, what we are doing is to find all available financing, for instance the emergency funding from the central bank on metering, in-network CAPEX as well as transmission and distribution interfaces. Those are being spent now,” he said.

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Economy

Nigerians Struggle as Sachet Water Prices Hit Record Highs Amidst Economic Hardship

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As economic challenges persist in Nigeria, citizens face yet another hurdle of soaring prices of sachet water, a vital source of drinking water for many.

Sachet water, colloquially known as ‘pure water,’ served as a convenient and inexpensive option for hydration, with prices starting at N5 in the early 2000s.

However, over the years, the cost has steadily climbed to as high as N50 per sachet.

This exponential increase has forced many Nigerians to seek alternative sources of water, including boreholes and wells, despite concerns about their safety.

Residents across the country, from Lokoja to Abuja, lament the financial strain caused by the inflated prices.

Marvelous Sanni, a resident of Lokoja, recounts how a bag of sachet water, once priced at N200, now sells for N400 to N500.

Families like hers have been compelled to turn to borehole water, raising questions about sanitation and health risks.

The situation is dire for households like that of Margret Danjuma in Abuja, who can no longer afford the daily consumption of sachet water.

Resorting to purchasing water from boreholes, Danjuma reflects the broader struggle faced by many Nigerians in securing clean and affordable drinking water amidst economic turmoil.

Local businesses, too, feel the pinch, with some restaurants discontinuing the provision of water to customers or resorting to unconventional methods like selling water in nylon bags.

The Association of Pure Water Producers attributes the price surge to rising production costs, including the cost of materials and treatment.

Experts and consumer protection agencies express concern over the unjustifiable price hikes, attributing them to greed and cartel-like behavior within the industry.

Calls for government intervention to regulate prices and ensure affordability resonate amid the growing hardship faced by Nigerians nationwide.

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Port Harcourt Refinery Receives Over 450,000 Barrels of Oil – Mele Kyari

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NNPC - Investors King

The Nigerian National Petroleum Corporation Limited (NNPC) has announced a significant milestone in the rehabilitation of the Port Harcourt refinery, with over 450,000 barrels of oil already stocked into the facility.

Mele Kyari, the Group Managing Director of NNPC, disclosed this development during a press briefing after appearing before a Senate Ad-hoc Committee investigating the various Turn Around Maintenance projects of the country’s refineries.

Kyari’s revelation underscores the progress made in the rehabilitation efforts of the Port Harcourt refinery, which has been undergoing mechanical works alongside the Warri and Kaduna refineries.

The influx of crude oil into the Port Harcourt facility signals a crucial step towards its operational revival, following years of underperformance and neglect.

Addressing the Senate committee, Kyari reiterated NNPC’s commitment to fulfilling its promises regarding the refinery rehabilitation projects.

He emphasized the importance of regulatory compliance testing before commencing operations, assuring stakeholders that the Port Harcourt refinery is poised to restart operations within the next two weeks.

The news of the refinery receiving a substantial volume of oil injects optimism into the Nigerian energy sector, highlighting the potential for increased domestic refining capacity and reduced dependence on imported petroleum products.

It also aligns with the government’s broader agenda of revitalizing the country’s oil and gas industry to drive economic growth and self-sufficiency.

As the Port Harcourt refinery gears up for a potential restart, attention now turns to the forthcoming regulatory compliance tests and operational readiness assessments.

The successful revival of the refinery holds the promise of not only bolstering Nigeria’s energy security but also stimulating broader economic development and job creation initiatives.

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CBN Governor Transfers N100bn Worth of Fertilisers to Agriculture Ministry for Food Security Enhancement

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fertilizer - Investors King

The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, handed over N100 billion worth of fertilisers to the Federal Ministry of Agriculture and Food Security.

The ceremonial handover took place at the ministry’s headquarters in Abuja, where the Minister of Agriculture and Food Security, Abubakar Kyari, received the substantial contribution.

During the handing over ceremony, Governor Cardoso emphasized the CBN’s commitment to maintaining price stability, identifying the cost of food as a critical component of inflation.

He noted that addressing food inflation is pivotal due to the significant portion of household expenditure allocated to food and non-alcoholic beverages in Nigeria.

Despite the implementation of various measures by the CBN to curb inflation, the inflationary pressures remain largely driven by escalating food prices.

Cardoso acknowledged the challenges posed by transient inflationary pressures but expressed optimism about substantial alleviation by the third quarter of 2024.

The collaboration between the CBN and the Ministry of Agriculture aims to mitigate the surge in food prices by enhancing food productivity and security.

In alignment with its strategic shift, the CBN veered away from direct quasi-fiscal interventions and transitioned towards leveraging conventional monetary policy tools to execute monetary policies.

As part of this strategy, the CBN announced the allocation of 2.15 million bags of fertiliser valued at over N100 billion to support the Ministry of Agriculture in its efforts to enhance food productivity and security.

Minister Kyari praised the CBN for providing fertilisers, emphasizing their significance as the majority cost value in agricultural production inputs.

He highlighted the challenges faced by the agriculture sector due to various factors, including the COVID-19 pandemic, flooding, climate change, and the naira redesign policy.

However, Kyari expressed optimism about mitigating these challenges and reiterated the importance of fertilisers in agricultural production.

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