Power Generation Crashes By 1,835.6MW In Three Days

The total quantum of electricity on the nation’s power grid crashed by 1,835.6 megawatts within a period of three days.

After reaching a peak of 4,282.6MW on August 2, 2017, power generation dropped to as low as 2,447MW on August 5, according to the latest data on the performance of the grid obtained in Abuja on Sunday.

Power generation has continued to fluctuate for several months now, as operators blame the development on gas and frequency constraints.

The recent power briefing from the Transmission Company of Nigeria stated that 1,651MW of electricity could not be generated as a result of frequency management constraint on Friday alone, which was due to loss of feeders of power distribution companies.

It also stated that the reported gas constraint resulted in the inability to generate 505MW on the same day.

However, further findings showed that electricity generation since the beginning of August had continue to hover between 2,387MW and 4,280MW.

On Wednesday, data indicated that gas-fired electricity-generating turbines in seven stations across the country were dormant, a development that adversely affected power generation.

The industry data showed that on August 2, all the hydro and steam power stations had at least one hydro or steam turbine that was functional. It highlighted three hydro power stations as well as three steam stations.

But out of the 22 gas power generating stations that were captured in the report, seven had dormant turbines, and they were Afam IV-V, Alaoji NIPP, Olorunsogo NIPP, A.E.S, ASCO, Rivers IPP and Gbarain NIPP.

It was also gathered that increased gas constraints to power-producing turbines was another reason why some of the machines were left dormant.

The Executive Secretary, Association of Power Generation Companies, Dr. Joy Ogaji, recently announced that electricity producers were owed over N500bn by the market, adding that this had made it tough for some of the Gencos to pay their gas suppliers.

Ogaji had said, “For us to be able to procure gas, we need money. Gas companies are owed several billions by us. We are being owed nearly N600bn and we are owing gas companies nearly N200bn.

“Most of them now say they cannot supply anymore until we pay. In fact, most of the companies like Shell and Total now do what we call pay-before-service. And since the market is paying us 29 per cent out of the expected 100 per cent, how do we pay for the gas?

“Some of these power companies that you’ve heard about cannot put all their machines on, they will just select from maybe out of five machines; they will just put on two or one, depending on what you can pay for with respect to gas. That’s the situation and it is a precarious and pitiable state.”

 

<<PUNCH>>

Naira Reverses Gain, Closes At 363/dollar

The naira closed at 365 per United States dollar at the parallel market on Sunday, reversing the gain it recorded in the past week.

The local unit had closed last week at 363/dollar.

The naira, which initially traded at 365/dollar, recorded slight after the Central Bank of Nigeria sold $462m to players in the foreign exchange market last Monday.

Specifically, the regulator sold the total sum of $462,336,426.74.

A breakdown showed that the Retail Secondary Market Intervention Sales received the largest allocation of $267.3m, while the sum of $100m was offered for wholesale interventions; the sum of $50m was allocated to the Small and Medium Enterprises forex window.

Those requiring foreign exchange for Business/Personal Travel Allowances, tuition and medical fees, among others, got a total allocation of $45m.

The naira is forecast to trade in a narrow range this week, and is expected to get support due to dollar inflows from CBN.

At the official interbank market, the naira has stuck around 305.90/dollar since August 2016.

On the CBN Investor and Exporters FX window, the local currency was quoted at 367 to the dollar, Reuters reported.

Economic and financial analysts said the continued intervention by the CBN was helping the regulator to keep the local currency from depreciating beyond the current state.

They said if the central bank failed to sell the greenback, the naira could begin to slide further.

 

<<PUNCH>>

Board Sets 70% Local Content Target To Retain $14b

The Nigerian Content Development and Monitoring Board (NCDMB) has set an ambitious target of 70 per cent growth in local content over the next 10 years. This will enable the country to retain $14 billion from the $20 billion spent yearly in the upstream oil and gas industry.

When the Nigerian Content Law was enacted in 2010, local content in the industry was only five per cent but at the moment it stands at 26 per cent while what is retained in-country from the $20 billion spent yearly is $5 billion.

NCDMB Executive Secretary, Simbi Wabote, told The Nation in Lagos during on the sideline of the presentation of the upgraded Nigerian Oil and Gas Industry Content Joint Qualification System (NOGIC JQS), titled: Optimising the JQS functionalities for case of doing business with the board to industry stakeholders that the upgrade was meant to enhance the achievement of the set targets, adding that the targets are achievable.

With the robust NOGIC JQS, the NOGIC JQS portal would capture industry capacity, adequate categorisation, training, employment and expatriate quota management data.

Wabote said: “The NOGIC JQS portal will be sole system for Nigerian Content registration and prequalification of contractors in the industry after verification of contractors’ capacities and capabilities.

“It will ensure tender and expatriate quota management, proper record of issued Nigerian Content Equipment Certificate (NCEC), marine vessels categorisation, skills data bank.”

He added that indigenous and international oil companies (IOCs) will be compelled to make statutory submissions on it.

On the benefits of the upgraded NOGIC JQS, Wabote said on assumption of office, carrying out daily activities were cumbersome due to huge paper works. He said with the upgraded portal, the activities will be done electronically and will substantially reduce turnaround time, enhance internal efficiency and ensure transparency.

“It is in tandem with Federal Government’s Executive Order on Ease-of-doing Business and the 7Big Win, which are to boost transparency and stakeholder management, as well as government’s Economic Recovery Growth Plan (ERGP). It will also foster better institutional collaboration,” he said.

Wabote highlighted some of the achievements of the Board between 2010 and 2017 to include registration of 6800 service companies in the Board’s database, registration of 75,000 people on NOGIC JQS, receipt of 12,000 expatriate applications, and biometric capture of 3600 expatriates. Others are record of 2800 marine vessels, registration of 40 operating firms, issuance of 1200 Nigerian Content Equipment Certificate and registration of 550 marine vendors.

He said the workshop on the new JQS portal functionalities was meant to sensitise the industry and general public about the upgraded NOGIC JQS platform but with special focus on super-users and industry relevant stakeholders such as members of Petroleum Technology Association of Nigeria (PETAN), Oil Producers Trade Section (OPTS), Manufacturers Association of Nigeria (MAN), Nigerian Content Consultative Forum (NCCF) and Oil and Gas Trainers Association of Nigeria (OGTAN).

 

<<PUNCH>>

NNPC Eyes $16b From Shell, Chevron Deals

Two sets of alternative financing agreements on Joint Venture (JV) projects to boost reserves and production in line with government’s aspiration were executed in London between the Nigerian National Petroleum Corporation (NNPC) and two of its JV partners: NNPC/Chevron Nigeria Limited (CNL) JV and NNPC/Shell Petroleum Development Company (SPDC) JV.

The two projects are expected to generate incremental revenues of about $16billion within the assets’ life cycle including a flurry of exploratory activities that would generate employment opportunities in the industry, boost gas supply to power and rejuvenate Nigeria’s industrial capacity utilisation.

The agreement with Chevron would see the development of the NNPC/CNL JV Sonam Project (Project Falcon), hitherto financed through cash calls, to incremental proven and probable oil/liquids reserves of 211million barrels and proven and probable gas reserves of 1.9 trillion cubic feet within in Oil Mining Licences (OMLs) 90 and 91.

The project is expected to begin to bear fruits in next three and six months.

The  Group Managing Director, NNPC, Dr. Maikanti Baru, said the project is envisaged to achieve an incremental peak production of about 39, 000 barrels per day of liquids and 283million standard cubic feet of gas per day (mmscf/d) of gas respectively over the life cycle of the asset.

The JV partner, he said, had already spent $1.5billion representing 97 per cent of project completion costs, adding that the agreement would cover the remaining $780million to complete the project.

Giving a breakdown of the expected funding requirements of the Sonam Project, Dr. Baru said $400million is to fund the development of seven wells in the Sonam field (OML 91), the Okan 30E Non-Associated Gas (NAG) well (OML 90), and associated facilities including completion of Sonam NAG Well Platform.

He added that $380million would also be required to reimburse the JV partners for the 2016 portion of the funds committed to lenders that had been cashed and paid for.

He said the Sonam Project alone, would increase government’s earnings to $7.3billion over its life.

The agreement with SPDC, on the other hand, would facilitate the development of the NNPC/SPDC JV Project Santolina which comprise 156 development activities across 12 OMLs (OMLs 11, 17, 23, 25, 27, 28, 32, 35, 43, 45, 46 and 79) and 30 different fields in the Niger Delta.

The GMD said the development of the Sonam Project would be done in two phases, with the first phase focusing on short term activities involving Oil and Gas Generation (STOGG) programme comprising 128 rigless activities and 10 workovers. The second phase would focus on medium term activities that would involve further development of EA/EJA fields by drilling 14 new well and three workover ones.

 

<<THENATION>>

We’re Profiling Rich Nigerians For Tax Payment – Adeosun

The Minister of Finance, Mrs. Kemi Adeosun, on Thursday said that the Federal Government was currently profiling high net worth individuals to ensure that what they currently own as assets correspond with the amount they were paying as taxes.

She said this via a video posted on her Facebook page where she responded to questions from Nigerians about the implementation of the Voluntary Asset and Income Declaration Scheme.

The VAIDS offers a grace period from July 1, 2017 to March 31, 2018, for tax defaulters to voluntarily pay back to the government what they owed.

In exchange for full and honest declaration, the government promises to waive penalties that should have been levied and also waive the interest that should have been paid on overdue taxes.

In addition, those who declare their tax obligation honestly will not be subjected to any investigation or tax audit after the nine-month grace period.

The minister said Nigeria had one of the lowest tax compliance rates in the world with a tax to Gross Domestic Product ratio currently standing at six per cent.

She stated that with such a low tax-to-GDP ratio, the government needed to do all it could to shore up the tax revenue.

Adeosun explained that in the last 15 months, the Ministry of Finance had been building a database of high net worth individuals through information received from both local and international sources.

For instance, she explained that while the assets of some of the high net worth individuals had been obtained by the ministry through local sources, their assets owned abroad were obtained from the Panama Papers as well as other information supplied by countries, which Nigeria had tax treaties with.

The minister said a situation whereby policemen and other low income earners were paying taxes through deductions from their salaries, while high net worth individuals who should pay more, were evading payment was unacceptable to the government.

She added that the ministry would use technology to improve the rate of tax compliance.

Adeosun stated, “We only have 14 million taxpayers out of the 70 million active people. We are sharing tax information with other countries and this will help us draw a picture of taxpayers and their lifestyles.

“We are profiling high net worth individuals to enable us determine if what they pay as tax corresponds with their lifestyles. For 15 months, we have been doing that at the Ministry of Finance, and we are looking at their assets not only in Nigeria, but abroad.”

She explained that the Federal Government would implement its policy on luxury taxes.

The minister added, “We signed something yesterday (Wednesday) on luxury goods like champagne, brandy, whiskey, wines, and high-end jewellery. We’ve signed something that will bill access charge on first class and business class tickets; we are just doing the final parts of the implementation and we also want to try and amend the taxpayer book on high-end luxury cars.

“If we move our tax-to-GDP ratio up, it means we will be able to provide more services to our people. Many of the things we are not able to do are functions of the fact that we don’t have enough money.”

She explained that for the country to be called a rich nation, the citizens must be ready to pay the right amount of taxes to enable the government build roads, schools and other infrastructure.

Adesoun added, “We need to build more schools; we need to build more hospitals; we need to build more roads. This is not rocket science. Every country has challenges; there is nothing we are facing that other countries haven’t faced. Every poor nation has a very poor tax compliance rate, and every rich nation has a high compliance rate. So, we want to be a prosperous nation.

“So, what is in it for the citizens? If everybody pays, there will be far more money in the pool to be spent on the services that we need.

“These things are what we call public goods, and they are funded from taxes. If you have been all around the country, you’ve seen the need, you’ve seen the number of people that are living in poverty; we can lift people from poverty if we have the right money.”

She expressed satisfaction with the rate of response from Nigerians on the VAIDS scheme, adding that many companies are now willing to take advantage of the nine months amnesty period.

 

<<PUNCH>>

26 Stocks Appreciate, Market Gains N79bn

The Nigerian Stock Exchange market capitalisation soared by N79bn on Thursday as 26 counters appreciated. The NSE  All-Share Index advanced by 0.62 per cent at the end of trading, pushing the year-to-date return to 38.18 per cent.

A total of 412.122 million shares valued at N4.721bn exchanged hands in 4,207 deals.

The total volume of trades increased by 64.18 per cent, while market turnover expanded by 25 per cent. The market recorded 17 declines.

Equities market capitalisation closed at N12.799tn from N12.720tn.

Dangote Sugar Refinery Plc topped the gainers’ list, advancing by 9.8 per cent to close at N14 per share. Other stocks that featured on the list include C&I Leasing Plc, Airline Services and Logistics Plc, Livestock Feeds Plc and Cement Company of Northern Nigeria Plc.

On the other hand, Cutix Plc, which closed at N2.09 per share, emerged as the worst-performing stock with a five per cent decline in price. This was followed by NPFMicrofinance Bank Plc, May & Baker Plc, Mobil Oil Nigeria Plc and Aiico Insurance Plc.

Sector performance as measured by NSE sector indices showed that at the close of trades, only the NSE oil/gas index dropped, declining by 0.19 per cent.

The NSE banking, the NSE food/beverages, the NSE industry and the NSE insurance indices appreciated, gaining 1.57 per cent, 0.95 per cent, 0.23 per cent and 0.10 per cent, respectively.

Analysts at Meristem Securities said, “We attribute the markets’ performance to gains recorded on some large cap stocks, as well as the continued positive investor sentiments which have pervaded the market following the release of impressive financial scorecards by some companies.

“We expect the current market mood to be sustained in the coming week upon the release of the half-year results by the tier-1 banks.”

 

<<PUNCH

Dangote Sells N86bn Cement Stake To Foreign Investors

Dangote Industries Limited sold 2.3 per cent stake in Dangote Cement Plc to foreign investors on Tuesday in a stock market deal valued at N86.1bn ($236m).

Africa’s biggest cement maker has been selling small stakes to increase its free float, which is well below the Nigerian Stock Exchange’s required level.

Reuters, on Tuesday, quoted a spokesman for the NSE as saying that 416 million shares of Dangote Cement were sold at N210 each in six off-market deals negotiated between Stanbic IBTC and Meristem Stockbrokers.

The price was below Dangote Cement’s closing price on Monday of N223.75. Shares in the company, owned by Africa’s richest man, Aliko Dangote, jumped after news of the share sale, closing up 7.3 per cent at N240, valuing the company at N4.09tn ($11.2bn).

A spokesman for the cement maker told Reuters that the deal was between Dangote Industries Limited and some foreign investors, whom he did not identify.

The transaction increases Dangote Cement’s free float to 10.4 per cent, according to Thomson Reuters’ calculations, still well below a stock market requirement of 20 per cent.

It is the biggest company on the NSE, accounting for a third of the bourse’s total market capitalisation, and when it listed in 2010 the bourse waived its free float requirement because it wanted to encourage more companies to list.

It gave Dangote 18 months to reach the 20 per cent level, but a banking source said the company had still yet to meet its minimum float requirement as local investors disliked its high valuation and foreign investors had been deterred by a currency crisis in Nigeria.

In 2013, Dangote Industries sold 1.5 per cent of its 95 per cent stake in Dangote Cement to South Africa’s Public Investment Corporation for $289.3m.

Subsequently, it sold 1.4 per cent stake to Sovereign Fund Investment Corp of Dubai for $300m in 2014.

Last week Dangote Cement reported a 24.6 per cent rise in half-year pre-tax profit to N155.58bn

FG Seals Pact With Three Firms On Sugar Production

The Federal Government on Tuesday entered into an agreement with three sugar refining companies for the production of 1.5 million metric tonnes of sugar annually.

The companies are Dangote Sugar, BUA Group and Golden Sugar Company.

The agreement, which was sealed at the headquarters of the National Sugar Development Council in the presence of the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, will cover the second phase of the National Sugar Master Plan 2018 to 2023.

Under the pact, eight sugar refining sites, with a total land area of 187 hectares, will be covered based on the Backward Integration Plan of the Federal Government, while 1,550,524 metric tonnes per annum of sugar will be produced.

The number of jobs expected to be created based on the agreement is put at 65,805.

Speaking at the event, Enelamah said the plan would help to increase local sugar production and reduce the nation’ dependence on sugar imports.

He urged the companies to take the agreement seriously as the Federal Government would ensure that the impediments to the operating environment were addressed.

The minister said the plan of the government was to replicate the backward integration success recorded in the cement industry in the sugar sector.

“The whole sugar industry plan is extremely important for us as a nation. We want to replicate the success in the cement industry in the sugar sector,” he added.

The Executive Secretary, National Sugar Development Council, Dr. Latif Busari, said the council would ensure total compliance by the companies with the provisions of the agreement.

He explained that the council had already developed monitoring templates for the next phase of the NSMP.

Busari stated, “The refineries will sign on to the commitments, and what is required on the part of the refineries to meet the targets within the stated timelines is the deployment of resources and the necessary technical competences.

“Government, on the other hand, will address the identified constraints as appropriate, and ensure that their impact is minimised. Government will also ensure that the new guidelines for the BIP operators, which have been circulated, are adhered to by all.”

He said while the task ahead were enormous, the council would ensure that the expectations of the government for the sugar sub-sector were realised.

 

<<PUNCH>>

CBN Dollar Flow, Foreign Investors To Support Naira

The naira is forecast to trade in a narrow range in the coming days, and is expected to get support due to dollar inflows from the Central Bank of Nigeria and offshore investors.

The local currency was quoted at 364/dollar on the black market on Friday, slightly firmer than 368 last Friday.

At the official interbank market the naira has stuck around 305.90/dollar since August 2016.

On the CBN Investors and Exporters FX window, the local currency was quoted at 367 to the dollar on Friday, Reuters reported.

The cedi is expected to firm, lifted by dollar inflows from investors interested in buying a five-year Treasury bond, helped by renewed investor confidence after the Ghana Central bank cut its policy rate this week.

The local unit recovered this week after losses in mid-July triggered by comments by President Nana Akufo-Addo that Ghana would not extend its $918m IMF aid deal beyond April 2018.

Meanwhile, Uganda’s shilling and Zambia’s kwacha are forecast to weaken against the dollar in the next one week, according to traders.

Kenya’s shilling is expected to hold steady in the next one week, and traders said they anticipate the central bank to sell dollars to keep it from weakening further.

Specifically, the Ugandan shilling is forecast to weaken due to dollar demand from the energy sector.

 

<<PUNCH>>

AfDB To Invest $12billion To Boost Energy In Africa

African Development Bank (AfDB) has hinted of plans to invest the sum of $12billion to tackle the perennial energy crisis In Africa.

Giving this hint was the AfDB President, Dr. Akinwunmi Adesina.

According to him, the bank is investing $12billion in the energy sector on the continent for the next five years to leverage the $45-50billion required for energy development.

While lamenting that about 645 million Africans do not have access to power, Adesina disclosed that the AfDB provided $1.7billion in financing energy and help provide electricity for over three million people.

Speaking in Lagos at the launching of two books titled, ‘Transformative Paradigms in African Development” and “A Journey in African Development’ written by Chief Bisi Ogunjobi, a former Vice President of AfDB, Adesina who lamented that the intractable energy crisis has continued to have adverse effect on the continent, said African leaders must do everything within their powers to address the problem.

“The development of the private sector is crucial for African economies. The bulk of the private sector accounted for by small and medium scale enterprises, which lack financing to grow their businesses and their challenges are compounded by structural factors such as lack of electricity that drives up their cost of doing business.

“Unlocking access to affordable financing, reducing over-taxation and addressing the problem of power will unleash the incredible potential of the private sector, (hence) AfDB is supporting various countries’ efforts at power generation and distribution by investing huge sums money to take the continent out of darkness.

“In Nigeria, we provided $200million to support the Nigeria Electricity Trader to float bonds to address the challenges in the power sector. We supported the construction of Morocco’s Noor Ouzazarte, the largest concentrated solar power in the world, and also supported the development of the Lake Turkana Wind Power Project, the largest in Africa,” he said.

“Two weeks ago,” he said, “at the margins of the African Union Summit in Addis Ababa, AfDB also ” signed a new $6billion energy financing facility to be provided by Japan to support power system, transition including clean coal technology” for the continent.

Author of the book, Chief Ogunjobi who spent over 30 years of senior management and professional experience in national and international banking said the books look at the impact of the continent’s myriads of socio-economic development problems and offer solutions.

 

<<THENATION>>