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FG Approves Payment of N26bn to Power Firms

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  • FG Approves Payment of N26bn to Power Firms

The Federal Government on Wednesday approved the payment of N25.994bn owed by its Ministries, Departments and Agencies to electricity distribution companies.

The government also resolved to investigate the firm that was said to have exported poor quality yams from Nigeria to the United States.

These were the highlights of the decisions reached at a meeting of the Federal Executive Council presided over by President Muhammadu Buhari at the Presidential Villa, Abuja.

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, told State House correspondents that since the inception of the present administration, claims of debts by the government to the power firms had been a matter of concern, especially in the light of liquidity issues.

Fashola said the government had earlier agreed that it would only pay verified sums after proper verification was done.

He said, “We have concluded the verification and we now ask council to approve the verified sum of N25.994bn owed by the MDAs of the Federal Government to be paid to the Discos out of the claims of N67.41bn.

“So, there is a differential of about N41bn. That differential arises first because some of the claims do not belong to the Federal Government. Some are owed by state and local governments. Also, some belong to public international organisations and were classified as government debts.”

Fashola added, “So, there is more verification going on and undertaken at states and local governments, which we have discovered at the National Council on Power about a week ago. This is important so that the government can demonstrate its support for the private sector by paying its own debts so that the sector can do what it does well.

“Government has also approved that this amount that has been quantified be set off against the amount owed by the Discos to the Nigerian Bulk Electricity Trader, a 100 per cent Federal Government-owned subsidiary company. They also owe government for their unremitted collections for energy they have taken and have not remitted. They are owing government about N500bn.”

The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, also said the government had decided to investigate a company that exported a consignment of yams found to be of poor quality to the US.

He said, “One of the developments we were mandated to brief you on is about the consignment of yams, which was exported from here to the United States, and which according to the reports we have today, was found to be of poor quality.

“The ministry will investigate, because the ministry is not an exporter. The exporters are private people. We will investigate the company that exported it and ask our quarantine department to check and find out why such a consignment left here.”

Ogbeh also said the government was concerned about the high cost of rice, which he described as the most consumed staple in Nigeria.

He stated that rice growers and millers had been meeting in the last two days and had agreed to the plans that the government had been pursuing to arrive at a certain price.

“That means that in the next one month, the price of rice will become reasonable and the cost of rice would have reduced substantially,” the minister added.

 

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 long experience in the global financial market.

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Economy

Oil Prices Decline on Rising COVID-19 Cases

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Global Oil Prices Dipped on Friday as New COVID-19 Cases Jump Globally

Global oil prices decline on Friday as the number of confirmed COVID-19 cases surged across the world.

Brent crude oil, against which Nigerian oil is priced, declined from $43.47 per barrel it traded on Thursday during the Asian trading session to $41.60 per barrel on Friday at around 11:39 am Nigerian time.

global Oil prices While the price of US West Texas Intermediate (WTI) crude oil dipped from $40.97 per barrel it traded on Thursday to $38.78 on Friday.

Oil traders and investors are worried that the rising number of COVID-19 new cases would disrupt demand for the commodity and force refineries to shut down once again.

“I do not suspect many oil traders will be looking to place significant bids in the market today, suggesting prices may continue to wallow into the weekend,” said Stephen Innes, chief global markets strategist at AxiCorp.

Despite efforts by both OPEC plus and other top oil producers to halt falling oil prices and reduce global oil glut, the lack of a cure for COVID-19 remained global concerns.

As previously stated on this platform, until a cure is found the world would have to find a way to either work through COVID-19 or shut down activities completely.

This is coming a day after the Federal Government of Nigeria announced that it was putting school resumption plan on hold following the latest COVID-19 report that shows Nigeria’s confirmed cases crossed 30,000 on Wednesday.

In the United States, more than 60,000 new COVID-19 cases were reported on Thursday, forcing lawmakers to start contemplating the second phase of COVID-19 lockdown.

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Economy

We Are Losing N13.9bn Monthly Because FG Caps Tariff – Discos

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Discos Says it is Losing N14bn Monthly Because of NERC Capped Tariff

The Nigerian power Distribution Companies (Discos) have said they a losing N13.9 billion in revenue every month because the Nigerian Electricity Regulatory Commission, limited how much they can charge for consumption.

Ernest Mupwaya, the Managing Director, Abuja Electricity Distribution Company, made the statement during a presentation on behalf of the Discos to the House of Representatives Committee on Power.

The statement was after the Discos demanded realistic indices before the implementation of the proposed service reflective tariff, which was supposed to be implemented on July 1.

Mupwaya said there were some outstanding requirements before the service reflective tariff could be implemented.

“One of them is the removal of estimated billing caps. The financial impact of the Capping Order is an average loss of N13.9bn monthly, thereby, undermining or jeopardising the minimum remittance requirement,” Mupwaya stated.

The July 1 service tariff implementation was halted by members of the National Assembly, who prevailed on the Discos to shelve the date to the first quarter of 2021 due to the current economic challenges in Nigeria.

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Gbajabiamila Says Nigeria Can’t Compete in AfCFTA With Weak Industries

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Nigeria Must Ramp up Industrialisation to Prevent Dumping by Other Nations

The Speaker of the House of Representatives, Femi Gbajabiamila, has said the nation can not compete effectively in the African Continental Free Trade Area (AfCFTA) with weak industrialisation and manufacturing activities.

Gbajabiamila disclosed this while receiving Adesoji Adesugba, the newly appointed Managing Director of the Nigeria Export Processing Zones Authority.

The details of the visit were made public on Thursday in a statement titled, “AFCFTA: House Speaker tasks Nigeria on industrialisation through free trade zones.”

Gbajabiamila was quoted as saying “We must act proactively so that we don’t become a dumping ground for other African nations.

“Our best option in this circumstance is to immediately set machinery in motion to ensure the effective functioning and flourishing of our export processing zones.

“We must remove all bottlenecks and perfect all stumbling blocks. We will then be fully prepared for AfCFTA and also generate massive jobs for our unemployed youths and enhance our foreign earnings.”

He added that the nation must as a matter of national emergency ramp up industrialisation through free trade zones and other effective means to compete with South Africa, Africa’s most industrialised economy and other African nations.

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