CBN grants La Fayette Microfinance Bank national operating licence

The Central Bank of Nigeria (CBN), has granted Advans-La Fayette Microfinance Bank a national operating licence.

Following the CBN nod to function as a national microfinance institution, Advans-La Fayette would no longer function as a regional microfinance bank. Instead, it can now function anywhere in the country.

At a ceremony held to mark the newly-acquired licence in Ibadan, the Managing Director and Chief Executive Officer of the bank, Guillaume Valence, said the acquisition of the licence was a major milestone for the bank and a piece of good news for medium and small scale enterprises.

New milestone for La Fayette: Valence said the bank was aware of the determination of the Federal Government to ease the process of doing business in the country and also to empower small and medium scale entrepreneurs and make them have access to capital.

According to him, La Fayette would be deploying modern banking techniques to make banking fun for its customers and also contribute to the growth of the economy.

He emphasised that the bank did not get the licence so as to make up the number. “With this new development, advans-la fayette microfinance bank is poised to become one of the major players in the nation’s banking industry.

We are not in the industry to make up the number. We are here to provide the kind of service that will be second to none. We want to earn the confidence of the banking world and we will achieve that.”

About La Fayette: As a member of the Advans GroupLa Fayette was licenced as a financial institution by the apex bank in 2012 and started offering a complete range of financial services and means of payment for its customers including savings accounts, current accounts and fixed deposit accounts. 

Over the years, the bank has grown to become one of Nigeria’s leading microfinance banks; fully committed to responding to the needs for financial services of micro, small and medium-sized enterprises (MSMEs). It also caters to other members of the public who have little or limited access to formal financial services, through the provision of tailored financial services in a sustainable and responsible manner.

Source: nairametrics

Implication of Emefiele’s Reappointment on Financial Markets

Last week, President Buhari reappointed the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, for another 5-year term in office.

The reappointment, which was confirmed by a letter sent to the Senate for legislative confirmation, marks the first key strategic economic decision made by President Buhari since his re-election in February 2019.

Analysing market reactions to the news, the fixed income market responded somewhat positive as yields on fixed income instruments on Friday (a day after the announcement) trended lower across board, owing to increased demand by foreign investors evident in the high influx of FX recorded on the I & E window during this period.

Notably, the total amount of FX traded on the window on Friday settled at $367.2 million, accounting for 37.8 percent of the total FX turnover for the week.

For the equities, the bearish theme that characterized the market, even before the announcement, continued, as the All-Share Index dipped further by 0.2 percent on Friday, predicating a weaker YTD return of -8.2 percent.

Overall, the reappointment of the CBN governor signals stability in the monetary policy environment and points to further support a consistent exchange rate policy, which could predicate increased confidence for fixed income investors.

Nonetheless, the likelihood for reforms to stay tepid implies that activities in the equity market may continue bearish in the interim.

Source: businesspost

Nigeria misses 6 electricity tariff reviews as current prices become obsolete

Since the power sector privatisation in 2013, the Nigerian Electricity Regulatory Commission (NERC) has failed to review electricity pricing six times under the Multi Year Tariff Order (MYTO) it instituted to price electricity, a failure that has fuelled illiquidity in the sector and caused shortfalls of nearly N1.4 trillion.

According to the MYTO Rules, there would be a 15-year tariff path for the Nigerian Electricity Supply Industry (NERSI) with limited minor reviews each year in light of changes in a limited number of parameters (such as inflation, interest rates, exchange rates and generation capacity) and major reviews every five years, when all of the inputs are reviewed with stakeholders, but this has not been done since 2016.

The current electricity pricing does not benefit the customers who cannot enjoy quality service because they are compelled to pay a tariff that is less than the cost of production and so are forced to rely on generators where they pay five times the current tariff.

It does not also benefit the operators who are compelled to charge below their cost of production and lack motivation to invest and improve service.

“Today, electricity pricing is wrong. The model is not fair. The average today is N27.30. What will be reasonable to sustain the industry is N57.40. This includes the debates around gas pricing too,” Kola Adeshina, chairman of Sahara Group, told BusinessDay.

“We are suffering from lack of six tariff reviews. Whereas the consumers are agitated and worried, the reality of our life is, the power generator gives invoices to the bulk trader at an exchange rate of N360/$, the distribution companies are made to charge the customer using an exchange rate of N199/$,” Adeshina said.

Power generation companies bear the biggest pain in this warped pricing system.
Egbin Power, Nigeria’s biggest generation company, is owed over N160bn. Other GenCos complain of large debts because invoices are not fully settled by the Nigerian Bulk Electricity Trading Company which can only pay about 30 percent of invoice. The Transmission Company of Nigeria recently said it gets paid only 25 percent of its market invoice.

“The solution to the problem is to pay the true cost of power,” said Sunday Odutan, executive secretary, Association of Nigerian Electricity Distribution Companies (ANED), in a meeting with Eko DisCo customers in Lagos.

In addition, operators are calling for a fund to cushion the temporary impact of a tariff increase on the most vulnerable members of the society.

Analysts say the prevailing tariff will only worsen liquidity gaps in the sector as the variables that went into costing electricity have changed since 2015.

“The prevailing DisCo tariff today was modelled against variables that have been overtaken by time and events and therefore does not reflect the true pricing of electricity. MYTO 2015 for DisCos was built on 196/$1, 8.3 percent inflation rate, certain available capacity and therefore the final tariff was a product of these variables. While they have all moved higher, tariff has not,” Chuks Nwani, energy lawyer, said.

NERC’s failure to implement MYTO Rules led to media reports that it has jettisoned MYTO, but the regulator insisted it was keeping its rules.

In a press release issued in June last year, NERC said, “Following recent inaccurate reports in the media, the Nigerian Electricity Regulatory Commission hereby reaffirms that there are no plans to dump the Multi Year Tariff Order (MYTO) framework used in determining end-user tariffs based on revenue requirement of the electricity industry.

“As part of the periodic evaluation of software models utilized by the Commission, the Commission plans to review the MYTO financial model to ensure its integrity and consistency of the platform with approved tariff principles pursuant to the numerous updates undertaken since inception of the methodology in 2008.

“The holistic review of the MYTO model also includes aligning the basic assumptions and parameters with the underlying principles of the tariff methodology and ascertaining the full workability of the macros and other formulae. This is an important initiative of the Commission as we prepare to commence review of Performance Improvement Plans (PIP) to be submitted by utilities for the tariff period 2019-2023.”

Under the Power Sector Recovery Programme, failure to review tariffs has slowed full implementation of the programme and threatened the capacity of the sector to benefit from loans from international institutions such as the World Bank.

Operators are now calling on the regulator to implement its own rules to make the sector viable.

Source: By ISAAC ANYAOGU & STEPHEN ONYEKWELU

DMO makes history as FGN risk-free yield curve extended to 30yrs

The Nigerian debt capital markets (“DCM”) experienced a landmark occasion in April 2019, when the Federal Government of Nigeria (“FGN”), via the Debt Management Office (“DMO”), issued its longest-tenored local currency bond – a 30-year bond – for the first time in history.

The issuance of the ₦53.16bn Fixed Rate (14.80 percent) FGN Bond is a clear indication of the commitment of the improving Nigeria’s ability to raise sustainable debt towards promoting economic growth and national development.

Investors demonstrated their ardent appetite for the issue with the results of the April 2019 FGN Bond Auction revealing that a total subscription of ₦80.41bn was received for the ₦20.00bn offered (₦53.16bn allotted) by the DMO for the 30-year bond, representing an over 400 percent subscription rate. This is a glaring indication of investors’ desire for investments at the longer end of the sovereign debt yield curve.

Whilst the decision to issue a long-tenored bond is not an anomaly, this latest issuance comes almost 40 years after the last 25-year bond (previously the longest-tenored local currency FGN Bond) was issued by the FGN in 1980, following previous issuances in 1976 and 1979.

With the success of this offering, the DMO has, in addition to managing government’s debt sustainably, reinforced its role in the development of the domestic capital market by facilitating the extension of the sovereign debt yield curve, which represents appropriate funding for housing credit and infrastructure as well as an investment opportunity for both pension fund administrators (“PFAs”) and insurance companies looking to reduce mismatches in their asset durations and liability horizons.

The DMO has listed the bond on the platform of FMDQ OTC Securities Exchange (“FMDQ”) to enhance its visibility and promote secondary market liquidity for the bond. The DMO also listed the bond on the Nigerian Stock Exchange.

The capital market community has lauded this audacious move by the DMO, which positions Nigeria to stand amongst other African markets such as South Africa and Kenya which have previously issued 30-year bonds. Nigeria remains the leading West African nation as stakeholders expect this bond issuance to serve as a case study for other countries within the region, to take the plunge by extending their yield curves.

“The introduction of the bond is a welcome development as it creates further opportunities for growth in the Nigerian financial markets,” said Bola Onadele. Koko, managing director/CEO of FMDQ.

“Furthermore, yield curve extension creates more impetus and opportunities for the introduction of risk management (hedging) products such as bond futures and interest rate derivatives to help fund managers (such as PFAs) and insurance companies that have invested in the bonds to manage the interest rate risk, which is typically higher for longer-tenored debt securities. We are aware that FMDQ, the capital market regulators and other market stakeholders are intensifying concerted efforts to launch these hedging products soon to improve the diversity and global competitiveness of the Nigerian financial markets,” Onadele. Koko said.

“The DMO should indeed be congratulated for its proactivity in reaction to the desires of the buy-side which motivated the DMO’s request to one of the Exchanges to conduct a survey to determine the local and international markets’ appetite for FGN Bonds with tenors over twenty (20) years, and also on their impressive speed to action on the feedback received from the exercise, which indicated the considerable interest by the surveyed investors in longer-tenored sovereign bonds,” he added.

Other stakeholders have indicated that the DMO has cleared the path for other issuers such as subnationals and corporates to access longer-term funding for their projects as the 30-year FGN Bond serves as a benchmark for pricing of non-sovereign debt at the longer end of the yield curve.

Onadele. Koko further added that evidence from the recent issuances of the Viathan Funding PLC ₦10.00bn 10-year bond (the first power bond in the country) and NSP-SPV Powercorp PLC ₦8.50bn 15-year bond, both of which were also listed on FMDQ, indicates that corporates are already taking initiative by accessing the DCM to channel funds towards infrastructure and other economically stimulating projects. It is expected that many non-sovereign issuers would follow suit in the short to medium term.

Considering the encouraging success of the debut 30-year FGN Bond, the DMO is encouraged to continue to blaze the trail for the markets. The introduction of more diverse bouquet of long-tenored securities such as inflation-linked, floating rate and zero-coupon bonds, will promote better management of realised and real yields among others. This will indeed support the development of the Nigerian economy by further deepening the domestic DCM, making Nigeria a more attractive investment destination.

Source: Business Day

500 bills pending at 8th National Assembly

As the Eighth National Assembly winds down, there are growing concerns among analysts as over 500 bills are still pending in both chambers of the National Assembly.

Findings has revealed that while the Senate has passed over 285 bills since inauguration on June 9, 2015, President Muhammadu Buhari has so far declined assent to 41 bills passed by the National Assembly within the period under review.

Although the National Assembly has commenced the process of reconsidering and passing some of the bills earlier rejected by President Buhari, pundits say with less than one month to the end of the Eighth National Assembly, this would be a tall order.

Our reports that the life of the Eighth National Assembly ends on June 8, 2019.
Investigations showed that some of the bills still pending in the National Assembly include the National Housing Fund Bill, Small and Medium Enterprises Development Agency Bill, Federal Mortgage Bank of Nigeria Bill, Industrial Development (Income Tax Relief) Amendment Bill, Stamp Duties (Amendment) Bill and National Agricultural Seeds Council Bill.

Also yet to be passed are the four petroleum industry-related bills, namely, the Petroleum Industry Governance Bill, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and the Petroleum Host and Impacted Communities Bill.

The Agricultural Credit Guarantee Scheme Fund (Amendment) Bill, Chartered Institute of Entrepreneurship (Est.) Bill, Nigerian Maritime Administration and Safety Agency (Amendment) Bill, Advance Fee Fraud and Other Related Offences (Amendment) Bill, as well as over 10 constitution amendment bills are also yet to be passed.

Others include Climate Change Bill, National Transport Commission Bill, Federal Road Authority (Establishment) Bill, National Broadcasting Commission Amendment Bill, National Oil Spill Detection and Response Agency (NOSDRA) Act (Amendment) Bill, Electoral Act (Amendment) Bill, Suppression of Piracy and other Maritime Offences Bill, Federal Audit Service Bill, Anticipatory Opening of Bank Accounts for Corporate Customers (Prohibition) Bill, among others.

While some of the bills are awaiting second reading, third reading and committee stage, others are pending concurrence, even as other proposed legislations are being reconsidered after the President rejected them.

In the same token, some bills have been passed but are still being cleaned up by the Legal Services Department.

Kabiru Gaya (APC, Kano), chairman, Senate Committee on Works, told BusinessDay in an interview that the National Assembly would make conscious efforts to ensure that most of the bills are passed before the end of the Eighth Assembly.

Gaya, who is also a senator-elect in the Ninth Assembly, admitted that taxpayers’ money would go down the drain if the bills are not passed by the Eighth Assembly.

The former governor of Kano State, however, said there was no cause for alarm as, according to him, bills that could not be passed by the current National Assembly would be rolled over and passed by the incoming Ninth Assembly.

“We are trying hard to make sure that these (pending) bills are passed. For those the President made observations, we are trying to correct those observations the way the Executive wants it and send it back to the Executive to sign it quickly. Why we are doing that is because we don’t want to lose the time, the taxpayers’ money we have spent in preparing these bills,” Gaya said.
“It takes not less than six months to one year to do a bill. And all that includes taxpayers’ money we have spent. So, we need to fast-track that. Otherwise, if all these lapse, it means we will start all over in the new Senate. Bring the bill for first reading, second reading, public hearing and third reading.

“So, we will look at those bills and appeal to Mr President that where these bills do not need another alteration, he can approve them and sign them, just like he signed the North East Development Commission Bill,” he said.

Gaya, however, cautioned his colleagues to be mindful of the kind of bills they sponsor, else the Executive may find it difficult to assent to them.

“We should be sending bills that are more dynamic and in tune with the current situation, not bills on associations, unions and so on. Let us have few bills that are good enough for the country,” he said.

Stakeholders also expressed worry that they may have to start from the beginning by re-initiating the bills and lobbying members of the Ninth National Assembly in order to begin fresh legislative process for the enactment of the bills.

Ralph Agama, a constitutional lawyer, called on lawmakers to devote more time to enacting critical legislations rather than embarking on endless breaks.

He, however, submitted that it was better for the National Assembly to delay the enactment of bills than hurriedly passing them and creating a lacuna when the bills are eventually signed into law.

This, he argued, is responsible for the increasing number of rejected bills.


“I don’t think that the National Assembly operates without rules governing procedures of whatever they do. So, if their assignment is governed by rules, they must first be seen to do it within the ambit of the law or the timeframe within which the law permits them to pass them.

The fact that these bills are critical for one reason or the other needs a lot of scrutiny to ensure that what they are delivering to Nigerians is that which can stand the test of time,” Agama said in a telephone interview with BusinessDay.

“And that is one of the things that we see when bills are transmitted to be signed into law without proper scrutiny, you discover that when these bills metamorphose into law, they will come with a whole lot of lacuna that at the end of the day, giving the interpretation to some of those provisions, people begin to cry foul for injustice.

“On the Electoral Act (Amendment) Bill, it is very vital to our democracy. And if anything is hurriedly done, it may still not stand the test of time. On one hand, there is the need for time to properly scrutinise bills, both executive and private bills, so that whatever will be given to Nigerians will stand the test of time.

“On the other hand, we can’t because this Eighth Assembly is running out, hurriedly pass those bills. You are sacrificing the interest of Nigerians on the altar of time. Take it leave it, governance is a continuous process. And so wherever they have stopped, these bills can still be brought back to the Ninth Assembly. It will be better than hasten up to pass those bills where at the end of the day, it will not satisfy the yearnings of Nigerians,” Agama said.

Source: By OWEDE AGBAJILEKE

Blackout looms as labour plans power transmission shutdown

The Trade Union Congress has asked Nigerians to look for alternative power source beginning from Monday (today), as it declared that it would shut down the nationwide operations of the Transmission Company of Nigeria today.

But the TCN described the move by TUC as ill-motivated, stressing that it was wrong for the labour union to claim that there was industrial disharmony in the transmission company.

It was also learnt that the plan by the TUC to ground operations at the transmission firm had caused disagreement between the two major unions in the power sector.

In a message to workers at the Abuja headquarters of TCN, which was sighted by our correspondent on Sunday, the trade union claimed that for some time now, workers of the transmission company had been subjected to inhuman treatment by the management of the firm.

The TUC stated that despite the interventions of labour, the TCN management had continued to disregard the Nigerian workers at the firm.

The union said it was on this note that the TUC directed its members to solidarise with the workers and ensure a total shutdown of electricity transmission facilities across the federation through the picketing of TCN offices nationwide on Monday, May 13, 2019.

The union urged Nigerians to bear with it and look for an alternative source of power pending when the issues are resolved.

But the transmission company said the plan by TUC to picket the transmission company was ill-motivated.

The General Manager, Public Affairs, TCN, Ndidi Mbah, told our correspondent on Sunday that there was no iota of truth in the statement credited to the labour union that there was industrial disharmony in the company.

The transmission company stated that “TUC was ill-informed by Chris Okonkwo, current President of the Senior Staff Association of Electricity and Allied Companies, having lost the support of TCN staff members in his bid to use the association to advance his selfish interest.”

It added, “TCN management believes that TUC, unknown to the union, is being used by unpatriotic elements. TUC, as a law-abiding organisation, is expected to find out why Okonkwo could not secure the support of TCN staff members, NUEE (National Union of Electricity Employees) or SSAEAC, TCN Branch before accepting to lead the picketing of TCN.”

Mbah stated that the union should know that TCN had successfully expanded the capacity of the grid from 5,000MW in February 2017 to 8,100MW in December 2018.

“It is on record that TCN receives less than 30 per cent of its revenue from the power distributors and yet it has been able to attain this unprecedented stride in grid expansion largely due to the support of the members of staff,” she stated.

Source: By The Punch

X-raying policy developments as pension sector hits trillions

The Retirement Savings Accounts (RSA) remittance data for the fourth quarter of 2019 recently released by the National Pension Commission (PenCom) showed that N15.36 billion has so far been remitted into RSA within the period under a recovery drive.The data also showed that funds were remitted into 966,155 employees’ accounts out of 2,044 organisations, but the private sector still controls the larger proportion of RSA.

Beyond the RSA remittances, PenCom has for years taken major steps to deepen the pension industry and protect contributors’ investments.

For example, of the N15.36 billion received into the National Pension Commission (PenCom’s) Retirement Savings Accounts (RSA) as at fourth quarter of 2018, the principal contribution was N7.87 billion and penalty of N7.49 billion, which raised hopes for pension contributors and the industry.

According to the report, PenCom received a total of 3,046 applications for the issuance of Pension Compliance Certificates, out of which 2,044 were approved and issued. Also, 1,002 applications were rejected for failing to meet appropriate requirements.

The report shows that the cumulative number of applications received during the year was 16,536 out, of which 16,100 were approved and issued certificates while 436 were rejected. PenCom reiterated that it continued to apply various strategies to ensure compliance with the provisions of the Pension Reform Act of 2014.

The pension industry had achieved a 1.63 per cent growth in the scheme’s membership during the fourth quarter of 2018, moving from 8.34 million contributors at the end of the preceding quarter to 8.47 million.The report showed that the RSA scheme, which had an increase of 138,236 contributors, representing 1.64 per cent, drove the growth recorded in membership. The RSA registrations also grew by 0.82 per cent (29,455) in RSA membership from the public sector to stand at 3.6 million. The figure represents 42.92 per cent of the total RSA registrations.

Also, the private sector membership rose by 2.32 per cent (108,781) in the quarter under review, bringing total registrations from this sector to 4.8 million, representing 57.08 per cent of total RSA membership. This growth can be attributed to the increased level of compliance by the private sector.

Further analysis of the report showed that the commission received 1,282 applications for transfer of Nigeria Social Insurance Trust Fund (NSITF) applications totaling N56.78 million. All applications received were processed and transferred to the RSAs of the NSITF members. From inception to December 2018, N19.64 billion had been transferred to the RSAs of 272,463 NSITF contributors.

Rising CPS
No fewer than 8.5 million people were enrolled in the Contributory Pension Scheme (CPS) since its inception 15 years ago, the Head, Communications Department, PenCom, Peter Aghahowa, said at the just concluded 30th Enugu International Trade Fair. The scheme introduced in 2004, was a process where a certain percentage of enrollees’ salaries were saved on a monthly basis with the employers also contributing. The scheme had PenCom as the regulatory body with Pension Fund Administrators (PFA) working under its directive.

Aghahowa said the scheme had made the life of retirees much easier, unlike the defined benefits scheme, which it replaced, noting that it had become imperative for every state of the federation to key into the scheme for easy pension administration.However, he said it was saddening that despite the enormous advantages inherent in the scheme, some state governments were yet to embrace the scheme to make life better for retirees in their respective states.

Protecting investments
PenCom has barred PFA’s from investing in the bonds of nine states that are yet to amend their state pension laws to join the Contributory Pension Scheme (CPS). Research also revealed that this restriction might be extended to 15 other states that had joined the CPS, but are not showing full commitment to funding the RSA of their workers.

The CPS was established under the Pension Reform Act (PRA) to replace the DBS. This was because the DBS had huge liabilities, which were not being funded, leading to situations where retirees endured long waits to get their entitlements, while many of them died without being paid. Unfortunately, the same scenario, which was prevalent in states operating the DBS, is now happening in the states operating the CPS due to poor funding of the scheme.

“The states have to enact the laws to do the CPS because they are going to operate based on the provisions of the laws. We can only encourage them because of the benefits in the scheme.“We don’t invest in bonds of states that have not enacted their laws. We have some that are not complying properly while some are complying partially. I believe we will review some of those things again. But for now, if you have not even enacted any law, don’t think we will start investing in your bonds,” he said.

New milestones
PenCom has deployed the RSA Multi-Fund Structure conceived by the commission to align with contributors’ risk appetite with their investment horizon, at each stage of their life cycle.The RSA Multi-Fund Structure is to achieve optimum returns for contributors by aligning their pension savings with their individual risk/return profiles, provide investment portfolio choices to contributors, and enhance the safety of pension assets through adequate portfolio diversification, increased investment in equities and alternative assets, such as infrastructure and private equity.

As of December 31, 2018, the RSA Fund had been successfully split into four funds, while the sensitisation of RSA contributors is still ongoing to create awareness on the features of the RSA Multi-Fund Structure. Presently, RSA contributors have the opportunity to choose a Fund that best suits their risk-return profile.

Recoveries
The commission, in line with the provision of the PRA 2014, has developed a framework for the recovery of outstanding pension contributions with a penalty for defaulting employers. Based on the framework, the commission has engaged recovery agents for continuous enrollment into the CPS and recovery of unremitted pension contributions and penalty from defaulting employers.

PenCom, under its Director-General, Mrs. Aisha Dahir-Umar, maintained that the services of Recovery Agents (RAs) were used for the recovery of outstanding pension contributions and penalty from defaulting employers.The agents were mandated to review the pension records of the employers assigned by the commission, with a view to recovering outstanding pension contributions with the penalty. For the period under review, the sum of N365.56 million was recovered by the RAs, bringing the total recoveries made by the agents from the inauguration of the exercise in 2012 to date to N15.36 billion, representing the principal contribution of N7.87 billion and penalty of N7.49 billion.

The recovery, which has been largely successful, has boosted the confidence of contributors and by extension encouraged non-participating employees and employers to embrace the Scheme. Both the principal contributions and penalty have been credited into the workers’ RSA accounts. The penalty is meant to compensate for the income that would have been earned if the contributions were remitted as and when due.

The commission is also prosecuting recalcitrant employers, who fail to remit their employees’ pension contributions into their RSAs and has instituted legal actions against 167 recalcitrant employers, out of which 78 have opted to settle out of court, while 34 judgments have been obtained and 23 are at different stages in the courts.Besides, the commission said it has a fully functional Complaints Monitoring and Resolution Team, which attends to complaints on non, late, or under-remittance of pension contributions into employees RSAs.

The implementation of various strategies has improved the level of remittance of pension contributions by the private sector employers, boosted the confidence of contributors and encouraged non-participating employers to embrace the scheme. PenCom noted that it has consistently been engaging various state governments, trade unions, relevant stakeholders and the general public on the full benefits of the CPS with a view to bringing them to full implementation of the scheme.

Source: By Victor Uzoho

‘Why Nigeria is still in darkness’

Nigeria is still in darkness because of infrastructural deficit and the huge debt owed power generation companies (GenCos) by power distribution companies (DisCos), Century Power Generation Company Limited Chief Executive Officer, Dr Chukwueloka Umeh, said at the weekend.

Century Power Generation is a subsidiary of Nestoil Plc, an indigenous conglomerate with interest in oil and gas, power generation, engineering and other key sectors of the economy.

He added that the bane of the industry include lack of provision of the right infrastructure by the Federal Government, absence of policy directions for operators to follow and funding among others. He said stakeholders are, however, awaiting the government to take the lead in ensuring that the sector moves forward.

According to him, key stakeholders such as the Ministry of Power and the Nigerian Electricity Regulatory Commission (NERC) should provide an environment that would enable power distribution companies generate enough revenue for investment purposes, adding that by so doing, they will find it easier to meet their obligations to the consumers.

Umeh said: “The government agency should allow the DisCos to make money in order to make timely payments to the power generation companies (GenCos) for the gas supplied to them by the gas companies. Once the DisCos are allowed to make money to cover their investment, they would be able to solve metering and other problems facing them.”

According to him, banks are willing to provide funds to operators, once the government has shown a considerable level of commitment in the industry.

He said: ”There is still a lot of excitement from banks and other private sector players when it comes to the issue of providing funds for the sector. There is still a level of excitement in the industry. This is not about the issue of whether the industry can work or not; the issue is that the industry would work because it is a matter of time once the necessary problems in the operating environment has been taken care, mostly by the government.

“Banks are not in business in order to give money to people freely. They are in business in order to improve their profitability, get enough shareholders’ value and help contribute to the growth of the Nigerian economy. They are not ready to lose money. So also is Century Power Limited. Banks are only waiting for the government to make the energy (sector) work.”

The Federal Government had provided a bail-out of N700billion to operators in the power sector about two years ago. Though the money was meant to strengthen the operation of the power generation and distribution firms, but the problems persist.

Source: By Akinola Ajibade

Experts back IMF’s stance on Africa’s rising foreign debt

Financial experts at United Capital Research have echoed the International Monetary Fund (IMF) and the World Bank on the Bretton Woods institutions’ advice to African countries to curb their appetite for foreign debt and instead focus on ways of increasing revenue internally.

In a note obtained by New Telegraph last weekend, the experts pointed out that despite the IMF and the World Bank warning about the long-term risks of rising external borrowings, African nations continue to accumulate foreign debts.

The experts stated: “In recent years, most African countries have turned to the international debt capital market to satisfy their funding needs while turning a blind eye to the cheaper but stricter loans by supranational organizations. “As at the start of 2019, 20 African countries have tapped into the Eurobond market, bringing the total outstanding African sovereign Eurobond to $92 billion with over 50 per cent of the Eurobonds with yields above seven per cent.”

Besides, they stated: “In our view, we allude more to the views of IMF and World Bank that African sovereigns need to look inwards to grow revenue and reduce their rising fiscal deficit. With that said, we opine that funds raised in the capital market should be tied to capital projects with matching funding maturity.”

Source: NationNg

Senate confirms Lemo, Rafindadi as FERMA chair, MD

The Senate has confirmed the nominations of Mr Tunde Lemo as the chairman of the Federal Roads Maintenance Agency (FERMA) and Engr Nurudeen Abdurahaman Rafindada as the Managing Director. The Senate also confirmed six others as Executive Directors of the agency.

Those confirmed were Buba Silas Abdullahi, Babagana Mohammed Aji, Engr Shehu Usman Abdullahi, Lorreta Ngozichukwu Aniagolu, Mujaidu Stanley Dako and Vincent Oladapo Kolawole,

Similarly, the Senate confirmed the nomination of Elias Mbam as the chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).

Senators also confirmed the nominations of 29 others as national commissioners of the commission.

Source: By Musa Abdullahi Krishi

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