₦airaland Forum

Sincere 9gerian: Another great news. We'r making progress. The various reforms are already impacting on the system. I'm just eagerly awaiting the explosive improvement in the power sector in the next couple of months. History is unfolding before our eyes.

Nigeria has recorded a significant improvement in its import trade figures as it saved N4.2tn in 2012 owing to a decrease in the importation of manufactured goods.

The Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, disclosed this during the opening ceremony of the ministerial session of the National Council on Industry, Trade and Investment, in Ibadan, Oyo State, on Thursday.

Aganga further revealed at the meeting with the theme, ‘Industrialisation as the driver of economic development, revenue diversification and wealth creation,’ that the country saved about N817bn due to a decline in the importation of textile, cement and vegetable oil within the same period.

He said, “In terms of trade, we have done very well. Nigeria’s external trade fell by 4.3 per cent, from N29tn to about N28tn in 2012. However, the good and exciting news is that the fall was as a result of a sharp decrease in the value of import from about N9.8tn to about N5.6tn by the end of 2012. That was a decrease of about 43 per cent in savings of more than N4.2tn, which has gone to the increase in the foreign reserves of our country.

“The last time that we had such a big fall in import, for a country that is largely import dependent, was in 2008; and that fall was about N1tn. This shows in real sense, a decreasing over-reliance on import for domestic consumption and a significant savings on our foreign exchange. That is why foreign exchange is going up.

“Specifically, for vegetable oil production, import fell from about N1tn to about N577bn; textile imports fell from about N190bn to N94bn, representing about 82 per cent decrease; while cement import fell from about N219bn to about N27bn. In total, these three sectors only contributed to more than N817bn to our foreign reserves because we are less dependent on import.”

The minister noted that the country also recorded significant improvement in non-oil revenue earnings within the last seven years with the non-oil sector accounting for 30 per cent of the nation’s revenue earnings in 2012, as against 15.5 per cent recorded in 2005.

He said, “Now, if you look at our exports, the figure has gone up by 15.5 per cent from about N19.4tn to about N22.4tn in 2012. In terms of oil and non-oil revenue, in 2005, oil revenue contributed about 94 per cent of our foreign earnings, while the non-oil sector contributed only six per cent.

“If you look at the same statistics in 2012, the oil sector contributed about 69 per cent while the non-oil sector contributed 30 per cent.”

As part of efforts towards diversifying the nation’s economy, enhance job creation and wealth generation, Aganga said his ministry had begun the implementation of its Nigerian Industrial Revolution Plan, based on areas where the country had comparative and competitive advantage

talktimi: Sahararepoters can construct fabrications (stories) with Autocad sha, this piece of trash lacks substance of basic reportage, much as I consider Dickson a thieving oaf, my objective mindset wouldn't buy this story if it was sold for free

Tolexander: who is more ignorant between you and i? Read whose comment? Guess you meant the post.

Why most the president compensate the states since the violence was done by their own people. Very obvious the compensation has an hidden motive.

otokx: appears to have been quoted out of context by the media as usual.

antiembezzle: Gbawe you are too old to sell your consience so cheap, are you saying fashola, tinubu and acn are not corrupt or you mean we don't have the right to hear about their wicked and corrupt activities in their various states,or that people are only right when they debase GEJ and PDP but praise acn? You better take your red eyes elsewhere you old shameless hypocrite. What we need is better leadership not minding whose ox is being gored and with this way you guys carry out your hypocrisy, buhari cried yesterday, tinubu cries today, fashola to cry tomorrow. Who the hell are you silly uncircumcised islamists trying to fool? Poor liars...

Gbawe: Not true. Personally, I have never argued any politician is corruption-free because that is not something that can be accommodated in Nigerian politics currently. If you say all politicians are somewhat self-serving then I agree but many, in all political Parties, still have the passion to improve the lot of Nigerians. We have to accept where we are with an eye on where we need to go.

You cannot get a 'clean' politician in Nigeria today. Impossible. Yet you can get leaders who are still delivering. That is the best we can get for now given the reality of Nigerian politics today.

ba7man: I know you're a PDP advocate but i like your neutral stand on this topic. Your post?? 100% correct.

ol2012: D power project being promoted by d Rivers state govt is a GENERATION & not a DISTRIBUTION company. All distribution companies unbundled from PHCN were offered 2 d private sector with about 10% stake(not sure) reserved 4 govts of their host states. The power sector reform act makes provision for every interested investor(local/foreign)as well as govts(federal, state & even financially capable local govts) 2 invest in d power GENERATION segment of d emerging power market.

honeric01: Make una dey continue to shed blood o, the land is getting more cursed.

Boko haram kills innocents and the guilty

JTF or whatever kills innocents and the guilty

So what exactly is the difference here? the innocent at the end of the day still suffers.

So it's like being between the ocean and the deep blue sea.

ewet: The PDP will not seize from tryn to hold us by the jugular by trying to be in control of evry thng even if it defies all logic.It is best the FG lets go of ths control all mentality,it is really killing us and doin nobody anygood.

berem: bomb dey your head i swear! I could remember sometime ago on this section when a poster called watchinglagos created a thread about this particular road. I also complained bitterly about the road. within some days, some emergency work was done on that same volks axis on the road at the right side going to mile 2.now i have seen by myself that the road construction is not at a slow pace.

this is the last time i will reply you on this thread.

otokx: but come o? is Benin - ore road not just a segment of Lagos - Shagamu - Ore - Benin - Warri - Port Harcourt - Calabar east west road?

President Goodluck Jonathan signed deals on Monday handing over state electricity assets to 15 bidding companies, a milestone in a privatisation process meant to end decades of power blackouts.

The handover in a ceremony at the presidential residence came a month after the bidders for 10 generation companies and five distribution companies paid deposits of 25 percent of the value of their bids.

The Power Holding Company of Nigeria (PHCN) is being broken up into 15 firms handling generation or distribution in different parts of the country; with the aim of doing something no Nigerian president has managed for decades: switching the lights on.

Despite being Africa’s top energy producer with the world’s seventh largest gas reserves, Nigeria produces and distributes only enough power for a few hours a day in the places that get it at all.

Economists say power outages cost Nigeria billions of dollars on imported diesel for generators and in lost output. They say current GDP growth of around 7 percent could be pushed into double figures if electricity supply could be sorted out.

Power output is currently about 4,000 megawatts for a country of 170 million people.

“Today’s event signals a major step forward in the implementation of our power sector road map,” President Jonathan said. “I congratulate the signing parties for reaching this significant target in our collective efforts to revitalize this sector, which is so important to our lives and development.”

Previous state sell-offs in Nigeria were blighted by political infighting and graft, which have caused years of delays. Regulators say this process was more transparent. Although it has appeared to favour established Nigerian oligarchs, some of them with scant experience of operating power companies, most have teamed up with capable technical partners like Siemens.

World Bank officials also signed a credit risk guarantee on a loan from Deutsche Bank’s U.S. subsidiary to finance gas supplies to the 1,320 megawatt Egbin Power Plant, which is based outside Nigeria’s commercial-hub Lagos, and of which Korea’s KEPCO was offered a 70 percent stake this month

Bank lending to the agriculture sector has improved in the past four years, increasing by almost 300 percent from about N75 billion in 2008 to N300 billion in 2012. However, total loans to the sector is only about 4 percent of banks’ portfolio.

This was disclosed recently by Sanusi Lamido Sanusi, governor, Central Bank of Nigeria (CBN), at a recent signing of a memorandum of understanding (MoU) involving the United States Agency for International Development (USAID) and the Ministry of Agriculture in Abuja. The MoU is aimed at providing credit guarantees for the agric sector.

With the MoU in place, banks can receive technical assistance in understanding the intricacies of agribusinesses so as to provide loans to farmers at lower interest rates.

However, the increased credit to the sector has medium and large sized food related companies as major beneficiaries. But this lopsidedness may change, as the operations of the Nigeria Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL) spread with the backing of the CBN, the ministry of agriculture and USAID.

With a balance sheet of N45 billion, NIRSAL, which became fully operational April 2012, offers 75 percent guarantees to banks on loans to agribusiness investors, farmers, companies and other related participants, and provides investment advice to farmer groups and value chains, strategic advice to state governments, cities and local governments on how to create an enabling business environment for agriculture and so on.

“We are expecting that NIRSAL will be able to unlock up to $3 billion (N480bn annually) worth of investment into the agriculture sector. We are running agriculture in Nigeria as a business. It is not a development activity,” Akinwunmi Adesina, minister of agriculture, said at the signing of the MoU.

According to Jude Uzowanne, head, NIRSAL department of CBN, over N6 billion in credit guarantee contracts were written in third quarter 2012 alone, and these credit guarantees are on the rise, tripling first quarter this year. In the value chains, NIRSAL works at improving rice, cassava, tomatoes, beef, leather, maize, soya beans, cotton, and has also begun delving into Jatropha, pineapples, oil palm and wheat.

Meanwhile, other lending schemes such as the CBN Commercial Agriculture Credit Scheme (CACS) are ongoing. CBN report in January indicates that it released N199.5 billion to participating banks for disbursement to 270 projects in the last year.

According to the CBN governor, NIRSAL was introduced to encourage banks to lend to farmers from their balance sheets, rather than just collecting money from the CBN for on-lending or the CBN guaranteeing, irrespective of their quality.

The credit guarantees of the schemes have caused banks to reduce the interest rate that is paid by farmers to banks on loans collected, as the guarantees assure banks that the money would still be recovered even if there is a default.

Other factor that has led to the increased bank lending to the sector includes initiatives by the ministry of agriculture, such as market facilitation. This year, banks that denied loans to cassava farmers in previous years are now on their trails with loan offers due to the launching of cassava bread and pastries in highbrow supermarkets.

Segun Adewunmi, president, National Cassava Growers Association, said recently: “We are now being pursued by banks, offering loans to us because the issue of inadequate market for cassava, which they gave as the reason for denying us loans in the past, has been addressed.”

The World Bank has provided its first Partial Risk Guarantee of $145m to support Nigeria’s gas sector to bring more electricity to consumers.

The PRG agreements in support of a Gas Supply and Aggregation Agreement were signed on Monday between the bank and the Power Holding Company of Nigeria, Egbin Power Plc, Chevron Nigeria Limited and Deutsche Bank.

Under the 10-year GSAA, which is based on the industry template developed by the Nigerian National Petroleum Corporation, Chevron will provide gas to Egbin power plant for power generation.

This will be the first time that Egbin power plant will be able to procure gas under long-term arrangements.

The World Bank Country Director for Nigeria, Francoise Marie-Nelly, said, “With over 75 per cent of Nigeria’s power generation depending on natural gas, assuring the availability and reliability of gas supply is a critical step in realising the goal of uninterrupted electricity supply to Nigerian consumers.”

He said the World Bank’s PRG, provided under the IDA-financed Nigeria Electricity and Gas Improvement Project, was key to enabling long-term gas supply.

The World Bank official explained that PRGs were used to cover private lenders against the risk of a public entity failing to perform its payment or contractual obligations.

Marie-Nelly added that the NEGIP PRG was instrumental to achieving financial closure of the Egbin GSAA transaction by providing payment security for Chevron for the supply of gas to the plant.

He noted that the payment security instrument used was a 10-year Letter of Credit issued by Deutsche Bank.

According to him, the absence of long-term gas supply arrangements has been one of the main causes of power outages in the country, as gas has to be procured on a “best endeavour” basis.

The gas, he stressed, was often of low quality and insufficient quantity, resulting in poor performance of power plants.

The World Bank stated that the long-term contracts enabled by the PRG would also help to encourage investments in upstream gas production by international and domestic oil and gas companies.

The Manager, Financial Solutions Unit, World Bank, Pankaj Gupta, said, “The use of the Partial Risk Guarantee to support Nigeria’s Gas Supply and Aggregation Agreement has provided the level of comfort needed by investors and paved the way for a new commercial framework for gas contracts.

“This will help to catalyse long-term private investments in Nigeria’s gas sector and underpin future investments in the power sector.”

He said that under the NEGIP, the World Bank had committed to a series of PRGs a total of $400m, of which the one for Egbin was the first to be signed.

Gupta said subsequent PRGs would support other gas supply agreements to PHCN plants and Niger Delta Power Holding Company of Nigeria’s plants.

Efforts to strengthen and expand Nigeria’s weak electricity transmission network would be buoyed by the federal government this year with a total bailout package of N40.6 billion, the Minister of Power, Prof. Chinedu Nebo, has said.

Nebo, who disclosed this at the weekend in Abuja, said government had initiated and obtained several bailout funds from sources that include international finance institutions to support maintenance and expansion efforts in the country’s transmission network by the Transmission Company of Nigeria (TCN) which had been adjudged bankrupt.

He stated that part of these bailout funds include a two-phased $150 million loan facility from the African Development Bank (AfDB) for maintenance and expansion of the transmission network, adding that other sources of funding were simultaneously being explored by the government.

Nebo who spoke about government’s long-term plan for the TCN, which was currently under a three-year management contract by Canadian firm, Manitoba Hydro International (MHI), admitted that the government was conscious of the deep weaknesses in the country’s transmission network, hence the various measures to remedy the situation.

“I think we need to look at it from not just that perspective because there is no doubt that cumulative decay and neglect brought together a system that is essentially very near to collapse but this has been strengthened and the government is working very hard to ensure that this is the case.

“For instance, the entire $100 million facility from the African Development Bank (AfDB) which is N15.6 billion is going into transmission without one kobo off and so I don’t think it is totally right to say that TCN is totally insolvent and neglected.

“The government realises that all these years of neglect have led to a situation where transmission which is actually supposed to be the pride of the entire sector have become the weakest link, and it is working in that direction and very soon with these interventions from government by acquiring this facility from the AfDB, we are putting all the money into transmission.
“That is not all, a lot more money is coming in and will be going into transmission too and within this year, we are not talking about something that is still far-fetched.

“Government is working hard and yes, you are right to say that it is the weakest and yet the strongest, it is supposed to be the strongest because no matter what you generate, if it is not evacuated or wheeled out to distribution companies, then of course there will be no electricity to the consumers, transmission ought to be the real giant of the entire value chain and government is still holding on it to ensure that the infrastructure is developed buoyantly enough and maybe in the future, one would also think about privatisation.”

Speaking further on the bailout plan for TCN this year, especially in the light of Manitoba’s evaluation of the finances of the company, Nebo said: “In addition to that facility, there is a huge budget which is larger than that, dedicated just to transmission alone and so a significant amount of money will be coming into the system not just to strengthen but expand the transmission network and we are working on that.

“I will say that another N25 billion will be put into transmission from the government budget this year and when you add it to the N15.6 billion and other funds that we are trying to gather to strengthen the transmission network because unless that is strengthened, we are going to have problems because if you are attracting companies to generate power and you are not wheeling this power out to distribution company, you will be losing a lot of money.”

He also gave details of the AfDB loan, saying: “It is a loan and it is $150 million, we have received $100 million and it is kept with the Accountant General of the Federation. It is all going into transmission and as we access and operate this, another $50 million will be released by the AfDB. So, we are talking of a very huge amount of money that will be invested in the transmission network alone within this year.”

The Niger Delta Power Holding Company Ltd (NDPHC) on Monday inaugurated a 600 Mega Volte Ambient (MVA) transformer in Oke Aro, a boundary town between Ogun and Lagos State.

Mr James Olotu, its managing director, said at the inauguration ceremony in Lagos that the project was currently the biggest transmission substation in the country.

Olotu, whose NDPHC is the owner of the National Integrated Power Projects (NIPP), said that the 600 MVA transformer had capacity to distribute 480 mega watts of electricity.

He said that the transformer would serve some part of its host states.

According to him, about a thousand NIPP projects will hopefully be completed in December.

``This transformer will serve Maryland, Ikeja West and even Akoka and Ijora, amongst other localities.

``This project is the biggest transformer system and the first of its kind in Nigeria. ``

He said that power supply would improve in Lagos and Ogun States with the inauguration of this transformer.

Olotu advised contractors handling the NIPP projects to live up to expectation so as to deliver on their mandate. (NAN)