Business

Nigeria’s Power Supply: Which Way Forward?

Published

9 years ago

June 8, 2015

The importance of power or electricity in the growth of any economy worldwide cannot be under-estimated based on the fact that every other sector depends on the availability of power to function effectively and productively. This understanding prompted President Muhammadu Buhari to single out dwindling power supply as the major cause of the nation’s poor economic performance over the years.
Buhari in his inaugural speech to the people of Nigeria at his swearing-in on Friday, May 29, 2015 at the Eagle Square, Abuja, described as a national shame that an economy of 180 million generates only 4,000MW, and distributes even less. According to him, continuous tinkering with the structures of power supply and distribution and close on 20 billion dollars expanded since 1999 have only brought darkness, frustration, misery and resignation among Nigerians, saying “we will not allow this to go on.”
He noted that careful studies are underway during this transition to identify the quickest, safest and most cost-effective way to bring light and relief to Nigerians.
Sounding similarly, Rivers State Governor, Barrister Ezenwo Nyesom Wike in his inaugural address to Rivers people said “we will seek to enhance our prosperity through power supply and energy security.
He stated that until steady power supply is taken for granted, our development efforts will be in jeopardy and so we will strive to achieve power and energy security for Rivers State in partnership with the private sector and the Federal Government as well as ensure the completion of on-going electrification projects.
“As an initial step towards tackling the challenge of irregular power supply before making fresh investments, we will conduct a forensic audit to find out the reasons behind the failure of the state to reap maximally from the huge investments already committed to the sector by the immediate past administration. “We will also review all issues relating to the secret privatization and or sale of government investments in power and other related projects without due process”, he stressed.
Meanwhile, the new administration of President Muhammadu Buhari is under intense pressure to reverse the privatization of power assets in the country initiated under the out-gone Goodluck Jonathan government. Another task given to the federal government is to increase its equity in the already privatized power assets from 49 to 59 per cent in order to have control in the running of such power assets across the country.
The move has already received endorsement from the National Union of Electricity Employees (NUEE) which called for immediate review of the power sector privatization exercise on the strength of alleged irregularities, fraud and worsening power situation in the country. The NUEE was responding to a statement by the out-gone Minister of Power, Professor Chinedu Nebo that the new government should not tamper with privatisation of the power sector.
According to NUEE, the privatisation of the sector has made the generation and consumption of power in the country to be ineffective, adding that the payment of over N200 billion to the private sector by the government after the privatization exercise leaves much to be desired.
Leaders of the union and General Secretary and factional president of Nigerian Labour Congress (NLC), Comrade Joe Ajaero said there is need for the Buhari presidency to revisits the privatisation because the exercise has not made any positive impact on consumers, months after it was done.
“We want to say, as a union, that the sham called privatization should be revisited. If privatization as we were told, was to bring us heaven-on-earth, and it has not done that, why would we insist on it? Of course, our position as NUEE has been No to privatization, especially given that we are an under-developed economy. It is the function of the state to provide power. Even the so-called privatization you can see that even this year alone, between January and now, they have even given the so-called private sector over N200 billion. So, why fund them if you say that electricity is in the hand of the private sector? That brings you to the fraud on who owns them. Why should you sell your house to somebody and you still give him money to maintain it? So, it’s a fraud,” Ajaero said.
There is a huge cry by electricity consumers nationwide that privatization of the nation’s power assets seem not to have generated the desired results as the power situation in the country continues to dwindle.
Industry sources said that given the flood of complaints by electricity consumers nationwide over constant power outages and huge estimated bills by the private owners of power assets, the new government of President Buhari may decide to take a second look at the entire power privatization process.
According to some industry experts, the new owners of the privatized assets are not helping matters as they are more interested in recovering their investment instead of upgrading dilapidated power facilities. “The new owners are more of financial experts who want to recover their monies so soon,” they said, adding that it is expected that if the Buhari government increases its equity share in the power companies, given its mindset to fight corruption, there would be improvement in power supply in the country.
Also adding their reaction to the attitude and activities of the private power owners the Independent Petroleum Marketers Association of Nigeria (IPMAN), urged the Federal Government to enact laws that would enhance utilization of power-saving technology and moderate electricity wastage.
Its Director of operations, Mike Osatuyi who made the appeal in an interview with newmen said the nation’s epileptic power supply had made it imperative for government to ensure effective power or electricity utilization and energy conservation. As he put it, “there is need for the government to enact a law to checkmate electricity wastage following the nation’s high demand for electricity supply,” pointing out that his company was prepared to partner with government agencies to provide the technology and technologists, equipped with technical know-how in energy conservation techniques.
He noted that the power-saving technology would reduce pressure on generation and eliminate the burden of huge investments on more generating plants by government. Osatuyi emphasised the need to operate an influential state structure for policy realisation in power efficiency and also monitor the activities of the private investors in the power sector.
Also expressing their worry over the poor services of the distribution companies since after the privatisation process, the Managing Director, Energy Solution Nigeria Limited, Mr Yomi Kolawole urged electricity consumers in the country to seek legal action against DISCOs to stop outrageous billing of the customers.
Kolawole said since the Federal Government handed over Power Holding Company of Nigeria (PHCN) to private investors last year, the electricity supply had worsened, while there had been a steady increase in monthly billing. He noted that some consumers have resorted to vandalizing DISCOs’ installations in their communities.
“Now that the power sector has been privatized, the individual companies must be held responsible for their actions.
They cannot continue to give consumers outrageous bills monthly without electricity supply. The Nigeria Electricity Regulatory Commission (NERC) had ordered all DISCOs to provide us with prepaid meters, but till now, they have not given up to 10 per cent of their customers”, Kolawole emphasized.
Some artisans in Lagos recently decried the increase in electricity tariff, saying that it negated the federal government’s policy on inclusive growth and self-employment. NERC chairman, Dr Sam Amadi had explained that the increase was a result of recent rise in the price of gas and other technical losses incurred by the power generation and distribution firms. But a barber interviewed had said it was wrong for NERC to increase tariff now that power was not stable.
A Lagos High Court has, however, stopped NERC from implementing the new tariff.
The way forward in the country’s power supply is in question and it is a herculean task before the present administration of President Muhammadu Buhari and other administrators of this nation.

Business

Paper Industry’s Economic Contribution Hits N398bn

Published

4 days ago

April 22, 2024

The Tide

The contribution of the paper industry rose to N398.8billion in 2023 from N356billion it recorded in 2022.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Musa Yusuf, disclosed this in a report released to mark the inauguration of World Envelopes Day in Lagos.
Marking the event, which also commemorated the 50th anniversary of envelope manufacturing firm, FAE Limited, Yusuf stated that the paper industry has a profound economic impact across all sectors of the economy.
He, however, noted that the growth in digital technology had greatly disrupted the sector, especially as a mode of communication.
“As of 2023, the value of the Nigerian paper industry was N398.8billion naira, according to the National Bureau of Statistics.
“The value was N365bn in 2022; N363 billion in 2021; and N255billion in 2020. This is a significant contribution to our GDP. However, when compared to the size of our economy, which is estimated at N230trillion as of 2023, it is still very small”, the CPPE boss stated.
Yusuf said the paper industry had been largely in recession because of the digital technology disruptions and other macroeconomic headwinds, especially relating to exchange rate depreciation, forex liquidity crisis and high cost of fund and energy cost escalation.
He emphasised that the paper industry had a profound economic impact across all sectors of the economy, which underscored the need for government intervention in the sector.
In her opening remarks, the Managing Director of FAE Limited, Funlayo Bakare, described World Envelopes Day as the brainchild of the company, which sought to set aside April 16 as a day to celebrate the fundamental role envelopes play in daily communication.
“As we celebrate our golden jubilee, we are delighted to announce the inauguration of World Envelopes Day, to be celebrated annually on the 16th day of April.
“This is a pioneering initiative by FAE Ltd in accordance with our leadership position in the sector.
“The establishment of World Envelopes Day is to raise awareness about the importance of envelopes in various aspects of human endeavour, including personal correspondence, business transactions, and creative expressions”, she said.
The Publisher of The Guardian Newspaper, Maiden Ibru, who chaired the occasion, stressed the need to strike a balance between digitalisation and physical paper production, especially due to the indispensable role paper plays in cultural preservation.
Nigeria once had three paper mills: the Nigeria Paper Mill Limited, located in Jebba, Kwara State; the Nigerian Newsprint Manufacturing Company Limited, Oku-Iboku, Akwa Ibom State; and the Nigerian National Paper Manufacturing Company Limited in Ogun State.
The mills are no longer operational, and the country has had to depend on importation to make up for the shortfall.
The Asset Management Company of Nigeria has taken over the management of NNMC over unpaid debts.

Business

Aviation Union Threatens Strike Over Revenue Deduction

Published

4 days ago

April 22, 2024

The Tide

The Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) has said it would embark on industrial action if the Federal Government refuses to exempt aviation agencies from a directive that seeks to deduct 50 per cent from their Internally Generated Revenue (IGR).
ATSSSAN disclosed this in a communique issued by its National Executive Council (NEC) after its National Economic Council meeting in Ibadan, Oyo State.
The NEC, which had in attendance all 17 affiliates of ATSSSAN comprising all branch Chairmen, Secretaries, and national officers, reiterated calls for the exemption of the aviation agencies from the deduction of 50 per cent of their IGR under the Fiscal Responsibility Act.
The association said the agencies were not established for profit, hence stifling them of the required funds would jeopardise the effective performance of their safety and security mandates.
ATSSSAN warned that if the Federal Government insist on the deduction, it would compound the current financial state of the agencies, and “we may be forced to direct all aviation workers to down tools until the government reverses itself”.
Last year, the Federal Government directed the Office of the Accountant General of the Federation to immediately commence the presidential directives on a 50 per cent automatic deduction from the IGR of Federal Government-owned enterprises.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, had issued a circular titled, “Re: Implementation of the Presidential Directives on 50 per cent Automatic Deduction from Internally Generated Revenue of Federal Government Owned Enterprises (FGOEs)”.
According to the circular, all partially-funded Federal Government agencies and parastatals (receiving capital or overhead allocation from the Federal Government’s budget) should remit 50 per cent of their gross IGR, while all statutory revenues, like tender fees, contractor’s registration, and sales of government assets, among others, should be remitted 100 per cent to the sub-recurrent account.
ATSSSAN stated its apprehension over what it perceives as deliberate efforts by certain private airlines to stop their employees from forming labour unions.
Citing Section 40 of the Nigerian Constitution and international labor norms, the association contends that such actions constitute a violation of workers rights.
The statement, however, did not specify the airline operators suppressing workers from joining unions.
Part of the statement read, “The NEC-in-session calls on all employers in the private sector in the aviation industry to respect collective bargaining agreements in order to avert industrial crises at the workplace.
“NEC-in-session was seriously disturbed by the continuous willful acts by some private airlines towards frustrating the unionization of their employees, contrary to the letters and spirit of Section 40 of the Constitution of the Federal Republic of Nigeria and relevant international conventions and laws”.
The association, therefore, called upon the Federal Ministry of Labour and Employment to uphold and enforce employees’ rights to unionise within the aviation industry.
It urged the Minister of Aviation and Aerospace Development, Festus Keyamo, to orchestrate a dialogue involving all relevant stakeholders, including the non-compliant airlines and labour unions, under the auspices of the Labor Ministry.
At the meeting, other issues affecting workers, especially members’ welfare and working conditions, and the aviation industry at large were discussed, and positions and resolutions were taken.
The aviation group decried what it perceive as a dearth of avenues for career progression within government-owned aviation entities.

Business

NCDMB Rakes In $1m Return On NEDOGAS Investment

Published

4 days ago

April 22, 2024

The Tide

Management of the Nigerian Content Development and Monitoring Board (NCDMB) says it has received a cheque of $1 million from Nedogas Development Company Limited (NDCL).
A statement made available to newsmen by the Directorate of Corporate Communications and Zonal Coordination of the Board said the sum received was part of the return on investment (ROI) on one of its strategic investments.
The statement added that: “The cheque was presented by the Chairman of the company, Engr. Emeka Ene, when he visited the Nigerian Content Tower in Yenagoa, Bayelsa State, where he was received by the NCDMB’s Executive Secretary, Engr. Felix Omatsola Ogbe, and other members of the Board’s management.
“Nedogas Development Company Limited (NDCL) is a joint venture company between Xenergi Limited and NCDMB Capacity Development Intervention Company.
“As part of the project, Nedogas NDCL constructed and commissioned a 300 MMscfd Capacity Kwale Gas Gathering (KGG) and injection facility located in the Umusam Community, near Kwale in Delta State, Niger Delta, Nigeria.
“The KGG Facility was designed to handle stranded gas resources in Nigeria’s OML56 oil province by providing the opportunity for independent operators in the area to monetize natural gas from their fields through the gas gathering, compression, injection and metering infrastructure of the KGG for quick market access.
“Nedogas is one of the several strategic and successful investments of the NCDMB funded from the Nigerian Content Development Fund (NCDF), in line with the Board’s mandate to build capacity and catalyze local projects in the Nigerian oil and gas industry as enshrined under the Nigeran Oil and Gas Industry Content Development (NOGICD) Act”.
In his remarks, according to the statement, the NCDMB Executive Secretary stated that the success story of NEDOGAS at Kwale, Delta State, could be replicated in other oil and gas producing communities to minimise gas flaring, saying that Ogbe also declared the Board’s readiness to continue collaborating with the company.
“Their model should be extended to other parts of the country where gas flaring is continuing.They have shown that with the modular system, we can quickly remove flaring from our operations in Nigeria.
“The NCDMB had continued to receive briefings from its investment partners. We’re still waiting for them to come back with success stories. Some of them are near completion and have not started operations yet”, the NCDMB’s Executive Secretary said.
In his remarks, Chairman of NEDOGAS, Mr. Emeka Ene, conveyed the company’s excitement in returning part of the credit and profit, adding that it was a proof that the NCDMB’s investment was a success and they are getting back that investment, adding that the firm looks forward to further collaboration with the NCDMB to expand its scope.
Responding, the NCDMB boss said the Board was now doing effectively and practically and tangibly what it was set up for, saying its mandate was to impact the economy by direct interventions.
“That’s the way the economy can grow, improve the gas infrastructure in such a way that’s sustainable despite the tight economic conditions”, he said.
He added that, “the value propositions of the Nedogas project include total eradication of flared gas and conversation of environmental pollutants into products of value and creation of a strategic gas gathering hub and injection node for quick access to market for gas owners to monetize gas”.
Other benefits, according to Ogbe, include the provision of alternative gas supply to western flank of the OB3 line to add to the volumes of economic sustainability and increase in Nigeria’s Gross Domestic Product (GDP).
“The partnership with NEDOGAS is one of NCDMB’s 15 strategic investments geared towards actualizing the Federal Government’s aspirations in key areas of the oil and gas industry.
“Most of the projects were targeted at actualizing the Federal Government’s Decade of Gas programme.
“Some of NCDMB’s notable third-party investments include Waltermith’s 5000 barrels per day (bpd) modular refinery in Imo State, Azikel Group12,000 bpd hydro-skimming modular refinery in Gbarain, Bayelsa State, and Duport Midstream’s 2,500bpd modular refinery in Edo State.
“Other investments of the Board include Better Gas Energy for LPG terminal and gas distribution, partnership with Rungas Prime Industries Limited to establish a cooking gas cylinders manufacturing plant in Polaku, Bayelsa State, and Alaro City in Lagos and the partnership with Butane Energy to deepen LPG utilization in the North”, he stated.
The Executive Secretary also noted that there was the partnership with BUNORR Integrated Energy Limited in Port Harcourt, Rivers State, to produce 48,000 litres of base oil per day and partnership with the Nigerian National Petroleum Corporation (NNPC) Limited, Brass Fertilizer and Petrochemical Company Limited, and DSV Engineering to establish a 10,000 Ton Methanol Production Plant, Odioama, in the Brass Local Government Area of Bayelsa State.