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Nigeria’s Power Sector Records 990 Megawatts Crash As Gencos Lose N1.8tn

The average amount of electricity utilized in 2021 was 4,118.98MW, higher than the 3,940.54MW recorded in 2022.




Nigeria’s power sector suffered another setback in 2022, this was concluded with the current generation capacity which has collapsed from 6,336.52 megawatts that was recorded in 2021 to 5,346.82MW in 2022.

Investors King gathered that this development was revealed on Monday in the latest data which showed the electricity generation trend that was released in a document by Gencos (Generation companies) in Abuja, the Federal Capital Territory (FCT).

The data shows that the current annual loss to power generation companies has drastically increased to a total of N1.8 trillion. As the data highlight a fall in the average usage of utilized electrical power in 2022.

The numbers obtained from electrical power companies revealed that while the average amount of electricity utilized in 2021 was 4,118.98MW, higher than the 3,940.54MW recorded in 2022.

Investors King understands that between the years 2013-2022, the country’s average available power supply was epileptic between, 4000 Megawatts and 7,700 Megawatts and this began when the energy sector was privatized in 2013 under the Goodluck Jonathan’s administration. 

The document further showed that the average utilized generation circled between 3,000 Megawatts and 4,000 Megawatts during the nine-year under review period (2013-2022), while unutilised generation revolved around 1,000 Megawatts and 3,700 Megawatts.

Joy Ogaji, the Executive Secretary, Association, Power Generation Companies, disclosed that the power sector only recorded a 100 Megawatts increase in power output yearly.

She further stated her doubts about the plans of the government to increase power output to 30,000 Megawatts in 2030 and emphasized her concerns with the current direction of power generation over the years, which one could easily foresee the future of electricity production in Nigeria.

In her words she said “Ogaji said, “100MW per annum growth. We can easily project in 20 years where we can be, aside from the political megawatts projection. Do we really have a market? If yes, what are the dynamics underpinning it?

“Is vision 2030 viable? At 100 MW per annum by 2030 we only need to add 700MW and we can foretell our target. Is 30,000MW projection realistic?”.

The document further revealed that the country’s diminishing power supply means that the average available power generation capacity in 2013, 2014, 2015 and 2016 were 4,214.32 Megawatts; 6,154.05 Megawatts; 6,616.28 Megawatts; and 7,039.96 Megawatts, respectively.

While in 2017, 2018, 2019 and 2020, the average available generation capacity figures were between the quantum of 6,871.26 Megawatts; 7,506.23 Megawatts; 7,381.67 Megawatts; and 7,792.51 Megawatts independently.

It was recorded that since 2018, the amount kept dropping as those of 2021 and 2022 were 6,336.52 Megawatts and 5,346.82 Megawatts apiece.

Whereas, for the average utilized generation, the Gencos’ report stated that in 2013, 2014, 2015 and 2016, the quantum of electricity employed was 3,183.51 Megawatts; 3,419.1 Megawatts; 3,606.05 Megawatts; and 3,212.02 Megawatts respectively.

The average utilized power in 2017, 2018, 2019 and 2020 was put at 3,599.33 Megawatts; 3,807.22 Megawatts; 3,782 Megawatts; and 4,050.07 Megawatts respectively.

For 2021 and 2022, the average quantum of electricity was 4,118.98 Megawatts and 3,940.54 Megawatts respectively, according to the numbers provided in the document released by the power generation companies (Genco).

It was estimated that over the course of seven years (2015-2022) a total amount of N1.8 trillion has been lost to power suppliers due to capacity payment loss. 

The document also stated that in 2015, 2016, 2017 and 2018, the annual capacity payment loss was N214.93bn, N273.32bn, N236.47bn and N264.08bn respectively.

For 2019, 2020, 2021 and 2022, the figures for annual capacity payment loss were put at N256.97bn, N266.1bn, N159.86bn and N132.19bn respectively.

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Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024




The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

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IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%



IMF global - Investors King

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

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South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty



South Africa's economy - Investors King

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.

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