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Towards Reforming Nigeria’s Power Sector

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Representative of  Senator Shehu Sani, Alhaji Suleiman Ahmed (left), presenting 500kva transfomer  to the district Head of Badarawa Majalisa Kwaru, Alhaji Abdulhameed Giwa in Kaduna recently.

Representative of Senator Shehu Sani, Alhaji Suleiman Ahmed (left), presenting 500kva transfomer to the district Head of Badarawa Majalisa Kwaru, Alhaji Abdulhameed Giwa in Kaduna recently.

It is disheartening that in
spite of the partnership the Nigerian government has established with the private Electricity Distribution Companies (DISCOs) and the huge sums invested in the power sector by the previous administration, the DISCOs still lack the capacity to carry out their own mandates. That is the mandate of ensuring regular or steady electricity supply to the populace of Nigeria.
Prior to the handover of the power sector to the DISCOs, the Federal Government and the United States had on August 9, 2011 agreed on the critical nature of the sector to economic growth in Nigeria.
The agreement was reached at the second meeting of the Working Group on Energy and investment of the US – Nigeria Binational Commission in Abuja. Nigeria was represented at the meeting by top officials of the Federal Ministry of Petroleum Resources headed by the Permanent Secretary, Engr. Goni Sheikh, while the U.S. team was headed by the State Department’s Special Envoy for International Energy Affairs, Ambassador Carlos Pascual.
The two nations reaffirmed their commitments to continue to cooperate in implementing the reform of the power sector and instituting best practices to ensure optimal performance of the sector and to attract needed investment. Recognizing the need for private sector participation in power sector generation, transmission and distribution, both countries acknowledged that renewable energy has an important role to play in rural electrification. They also realized that by reducing gas flaring and monetizing its resources, Nigeria would enhance its clean electricity generation.
Both Nigeria and the US at the meeting stressed the importance of the Global Alliance of Clean Cooking Stoves and affirmed their support to introduce fuel-efficient cooking stoves, especially to rural communities in Nigeria.
The government of the US pledged to continue working through the US Agency for International Development to enhance capacity building in support of private sector participation in Nigeria’s power sector. The Nigerian government on its part pledged to work toward a timely and comprehensive reform of the petroleum sector, recognising the critical benefits to Nigeria of a stable and transparent investment framework that upholds global standards of sanctity of contracts and comparable taxation regimes.
The United States recognized Nigeria’s leadership in attaining the status of Extractive Industries Transparency Initiative (EITI) compliant country and both sides pledged to work together to continue the process of ensuring the adoption of transparent rules and regulations in the extractive industries sector. The US team briefed the Federal Government on developments in the United States, including the Cardin-Lugar Energy Security Through Transparency Provision to the 2010 Wall Street Reform and Consumer Protection Act, which complements the work of the Extractive Industries Transparency Initiative.
Diversification from the national grid system into other alternative energy sources is another solution advanced for the reform in the power sector of Nigeria. The Managing Director of Ola Electrical Nigeria, a solar energy company, Mr. John Sola while speaking in an interview with The Tide said if Nigeria breaks from the grid system and adopts other alternative sources, more persons would participate in the power distribution and supply thereby allowing consumers to make choice.
According to him, the rivers, good climate with adequate sunlight and coal, among other sources could be transformed to electricity to serve the people. He said “if people begin to tap the abundant electricity or power resources, Nigerians will enjoy sufficient and cheap energy sources without necessarily expecting light from the national grid.
Sola noted that technology and finance remained the major challenges confronting prospective investors and urged the government to support them to invest in alternative power sources.
“Until the issue of power supply is properly addressed, the idea of accelerated development will remain a mirage in the country”, he said.
In their effort, the new investors in the country’s electricity generation and distribution have injected over N300 billion into the power sector in the last two years. Egbin Power Plc on its own has invested N50 billion to rehabilitate line six of its Lagos plant to generate extra 240MW. The Director-General of the Bureau of Public Enterprises (BPE), Benjamin Ezra Dikki, who disclosed this when he featured on Nigeria Television Authority’s (NTA) live programme- Good Morning Nigeria last year, pointed out that the investment was for the upgrade of power infrastructure which had become obsolete over the decades, noting that new technologies evolving gains in the sector would not manifest overnight.
He explained that unlike reforms in other sectors, which brought immediate results, the situation in the power sector requires time due to its capital intensive profile. As he put it, “power equipment like turbines and other ancillary products cannot be bought off the shelf. The investors have to place orders after which it will take between three to four months to manufacture the equipment before shipping. This takes time. Before Nigerians will begin to see dramatic changes in the power sector, it will take between two to three years. But already, significant impact has been made”.
The BPE Director-General said that because of the infrastructural dev- elopement by the investors, power interruptions in the country had reduced to the barest minimum while over 2,000 engineers and technicians had been employed since takeover. Dikki noted with regret that for over 16 years as a public monopoly, Power Holding Company of Nigeria (PHCN) neither employed nor bought in new investments into the sector. He also regretted that gas vandalism was impacting negatively on the plans to privatize the Nigeria Independent Power projects in the country.
Dikki, however, expressed optimism that with the new initiative put in place by the former President Goodluck Jonathan’s administration to safe-guard the pipelines through technological devices, the challenge would soon be surmounted, adding that the complaint of non-availability of electric meters to consumers was hinged on the complex technology used in producing smart meters, which are currently being used the world over.
The Director-General of the National Power Training Institute of Nigeria (NAPTIN) Reuben Okeke announced that the German government has built a 25 kilowatts power plant for the training of Nigerian engineers in renewable energy.
Okeke who announced this at a meeting with management team of the Nigerian Society of Engineers (NSE) in Abuja said Nigeria is expanding its local capacity to train technical workforce for the power sector while aiming to become a regional hub for required expertise in the electric power drive. To achieve this, he disclosed that the nation is equipping its power training centres with state-of-the-art simulators and training equipment, including electricity laboratories.
According to him, the NSE is collaborating with the NAPTIN to check quackery in the power sector and explained that the institute aimed to promote local skills above their foreign counterparts. “Our training plant is stationed at the Kainji Power Plant, Niger State and we have acquired a unique 450 mega watts combined circle simulator stationed at the Afam Power Plant in Rivers State to train mechanical and electrical engineers from Nigeria and other African countries. The facilities are for teaching and learning for renewable energy. There are also three wind turbines of 5 kilowatts each, and 10.5 kilowatts of solar PV to be operated as a hybrid.
“Renewable energy is one of the things that the Federal Government has decided for rural access ‘Operation Light Up Nigeria’, and we have to have, as well as establish where those who will operate, manage and maintain these facilities will be trained”, he said, adding “we are as well getting a complete electrical training laboratory in Kano, and we currently have about 3-4 of our instructors in Italy to master how to use this to teach”.
Okeke noted that Nigeria has huge potentials as far as human resources are concerned.
“We cannot go anywhere to import cables. NAPTIN has to be positioned in such a way as to satisfy the market, and we have collaborated with NSE and entered a pact towards ensuring that engineers in the power sector go through rigorous tests and examination”.
He stated that both bodies signed a memorandum of understanding in 2014 to make sure that young engineers in the power sector are well trained and well evaluated, adding “no matter the investments the federal government makes in any endeavour, particularly in the power sector, without the human capital, without the workforce, well trained and capable workforce to maintain the infrastructure, it will not work”.

 

Shedie Okpara

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NCAA Certifies Elin Group Aircraft Maintenance

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The Nigerian Civil Aviation Authority (NCAA) has certified Elin Group Limited to operate as an approved aircraft maintenance organization (AMO).
Elin Group Limited confirmed the certification in a Statement released at the Weekend.
The Executive Director, Elin Group Limited, Engr. Dr. Benedict Adeyileka, noted the significance of the certification, stating that it recognizes the company’s commitment to upholding high maintenance standards.
Adeyileka also stated that “the issuance of the AMO Certificates and OPSPEC by the NCAA is a landmark for both Elin Group and Nigeria’s aviation industry. This approval empowers us to maintain our fleet and extend services to other operators, thereby supporting the sector’s growth.
“It affirms the standards we have upheld over the years and places on us the responsibility to expand services that strengthen the aviation ecosystem. We thank the NCAA for their confidence in our capabilities.
“This recognition inspires us to keep striving for excellence and innovation in building a stronger, safer, and more sustainable aviation industry.”
The certification follows the company’s recent completion of a 7,800 landings maintenance check on its Bombardier Challenger 604 aircraft and Agusta A109E helicopter.
This type of inspection, similar to a D-check in commercial aviation, was conducted entirely in Nigeria for the first time.
With the NCAA approval, Elin Group is authorized to maintain its own fleet and provide maintenance services to other operators.
The certification is expected to contribute to the growth of local aviation maintenance capabilities.
“PenCom Raises Capital Requirement For PFAs To N20b
…Sets December 2026 Deadline
The National Pension Commission (PenCom) has announced a sweeping revision to the capital requirements for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs), raising the minimum threshold for PFAs tenfold, from N2 billion to N20 billion.
The move, aimed at strengthening financial stability and operational resilience, marks one of the most significant regulatory shifts in Nigeria’s pension industry in over two decades.
In a circular titled “Revised Minimum Capital Requirements for Licensed Pension Fund Administrators and Pension Fund Custodians”, PenCom stated that PFAs with Assets Under Management (AUM) of N500b and above must now maintain a capital base of N20 billion plus 1% of the excess AUM beyond N500 billion.
The revised capital requirements for both PFAs and PFCs would take effect immediately for new licenses, while existing operators have until December 31, 2026, to comply.
PenCom would monitor compliance every two years based on audited financial statements, and any shortfall must be rectified within 90 days.
PenCom emphasized that the review is anchored in Sections 60(1)(b), 62(b), and 115(1) of the Pension Reform Act (PRA) 2014. It aims to support the long-term viability of pension operators, improve service delivery, and ensure the sustainability of the Contributory Pension Scheme (CPS), which has now been in operation for 21 years.
“PFAs are therefore required to maintain adequate capital to sustain the achievements of the CPS, support ongoing pension reform initiatives, and deploy adequate resources to effectively fund operations,” PenCom stated.
PFAs with AUM below N500b are also required to meet the new N20 billion minimum. Special Purpose PFAs, such as NPF Pensions Limited, must hold N30 billion, while the Nigerian University Pension Management Company Limited is required to maintain N20 billion.
“The capital requirement was reviewed in line with global best practice, which ensures that capital is proportionate to the risk exposure of the Pension Fund Operator. The new model aligned the capital requirement with the Pension Asset Under Management (AUM) and Assets Under Custody (AUC) of the PFAs and PFCs respectively”, the circular stated.
For Pension Fund Custodians (PFCs), the minimum capital requirement has been raised from N2 billion, unchanged since 2004, to N25 billion plus 0.1% of AUC.
The Commission cited the exponential growth in assets under custody and the increasing complexity of operations, including technology deployment, cybersecurity, and staff welfare, as key drivers of the revision.
“The operating landscape of PFC business has evolved significantly over 21 years,” the circular noted. “These developments underscore the need to reassess the adequacy of the existing capital threshold to ensure continued financial stability and effective risk management”, it stated.
The announcement signaled PenCom’s commitment to aligning Nigeria’s pension industry with global standards, ensuring that operators are well-capitalized to navigate macroeconomic pressures and deliver secure retirement benefits to millions of Nigerians.
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SMEDAN, CAC Move To Ease Business Registration, Target 250,000 MSMEs

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The Corporate Affairs Commission (CAC) and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) are deepening partnership to ease business registration for small business owners in the country.
The agreement would provide the framework for free registration of 250,000 Micro Small and Medium Enterprises (MSMEs) across the country.
The Registrar-General, CAC, Hussaini Magaji, revealed this during the signing of a Memorandum of Understanding (MoU) between both organisations, in Abuja, at the Weekend.
Magaji said that the framework provided under the Renewed Hope Agenda of President Bola Tinubu’s administration would eliminate cost barriers by waiving all statutory fees.
According to him, entrepreneurs would now be able to obtain certificates seamlessly, without delays or middlemen, through the CAC portal.
He said, “Formalising a business is more than obtaining a certificate.
“It provides entrepreneurs with a legal identity, improves access to finance and markets, enhances record keeping and strengthens compliance with tax or regulatory obligations.
“For the government, it expands the tax base, improves policy design and reflects the two sides and contribution of our MSME sector.
“By formalising an additional 250,000 enterprises under this initiative, we are helping to create jobs, foster innovation and build a more inclusive economy,” he said.
The registrar-general, while commending SMEDAN on the partnership, urged the MSMEs to take advantage of this opportunity to formalise their businesses, access new opportunities and become part of Nigeria’s growth story.
Magaji also appealed to the media to Partner in amplifying this message to ensuring that every deserving entrepreneur is carried along.
On his part, the Director-General of SMEDAN, Charles Odii, hailed the initiative as a milestone for small businesses, describing it as one of the “big wins” of the current administration.
Odii explained that SMEDAN would mobilise, profile and guide eligible businesses for registration through its dedicated online portal.
He insisted that the platform would eliminate the role of middlemen, who previously inflated registration costs, sometimes charging between N30,000 and N100,000 against the official CAC rate of about N11,000.
Odii said the initiative would complement the President’s N200 billion economic assistance programme, which provides N50 billion in grants for nano businesses, N75 billion in single-digit loans for SMEs and N75 billion for manufacturers.
He said that the interventions demonstrated the resolve of government to ease the cost of doing business and expand opportunities for entrepreneurs.
The director-general said that the MoU was timely, especially as CAC prepared to review its fees by October, reiterating that the initiative ensures 250,000 businesses will benefit from free registration before the review.
According to Odii, many businesses collapse within their first five years due to a lack of structure, noting that registration was the first step to building resilience.
The SMEDAN boss assured that beyond registration, SMEDAN would continue to support entrepreneurs through business clinics, advisory services and linkages.
He said this would be done in collaboration with other agencies such as the Standards Organisation of Nigeria (SON) and the Nigerian Export Promotion Council (NEPC).
Odii also commended the President’s move to raise the tax exemption threshold for small businesses with N25 million to N50 million annual turnover, saying it will reduce the burden on enterprises and encourage compliance.
He thanked the Registrar-General of CAC, the Federal Ministry of Industry, Trade and Investment and the Chief of Staff to the President for their support in bringing the initiative to fruition.
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Blue Economy: Minister Seeks Lifeline In Blue Bond Amid Budget Squeeze

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Ministry of Marine and Blue Economy is seeking new funding to implement its ambitious 10-year policy, with officials acknowledging that public funding is insufficient for the scale of transformation envisioned.

Coordinating Minister of the Ministry,
Adegboyega Oyetola, said finance is the “lever that will attract long-term and progressive capital critical” and determine whether the ministry’s goals take off.
The Permanent Secretary of the ministry, Olufemi Oloruntola, stressed that the funding gap  must be closed to move from policy to practice.

“Resources we currently receive from the national budget are grossly inadequate compared to the enormous responsibility before the ministry and sector,” he warned.

He described public funding not as charity but as “seed capital” that would unlock private investment adding that without it, Nigeria risks falling behind its neighbours while billions of naira continue to leak abroad through freight payments on foreign vessels.

Oloruntola argued that the sector’s potential goes beyond trade, pointing to the surge of diaspora spending every festive season. With the right coastal infrastructure, he said, the marine economy could capture a slice of those inflows as foreign exchange and revenue.

The Chief Executive, Nigerian Exchange (NGX), Jude Chiemeka, said blue bonds, which are loans raised through the capital market, but tied specifically to projects that protect or develop marine projects, could unlock huge sums of much-needed capital.

He said “We have N24.6 trillion in pension assets, with 5 percent set aside for sustainability, including blue and green bonds,” he told stakeholders. “Each time green bonds have been issued, they have been oversubscribed. The money is there. The question is, how do you then get this money?”

The NGX reckons that once incorporated into the national budget, the Debt Management Office could issue the bonds, attracting both domestic pension funds and international investors.

Seychelles, he pointed out, raised $15 million from a blue bond to support its fisheries industry, a scale Nigeria, with over 853 km of coastline and significant freshwater bodies, could surpass.

Yet even as officials push for creative financing, Oloruntola stressed that the first step remains legislative.

“Even the most innovative financial tools and private investments require a solid public funding base to thrive.

“We therefore call on the relevant authorities, most especially the National Assembly, to prioritise the marine and green economy sector.”

“Nigeria must match ambition with resources” and “strategy into execution”, he said

It would be noted that with government funding inadequate, the ministry and capital market operators see bonds as alternative financing.

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