The report that eight years after the privatisation of Nigeria’s electricity sector, system inefficiencies, particularly high Aggregate, Technical and Commercial (ATC&C) losses, ageing infrastructure, poor customer relationship management and a history of lower cost-reflective tariffs continue to mar the sector’s growth is one of the trending stories in Nigerian newspapers on Thursday.
The Guardian reports that eight years after the privatisation of Nigeria’s electricity sector, system inefficiencies, particularly high Aggregate, Technical and Commercial (ATC&C) losses, ageing infrastructure, poor customer relationship management and a history of lower cost-reflective tariffs continue to mar the sector’s growth.
This is according to a new report highlighted in a quarterly report published by Nextier on the Nigerian Electricity Supply Industry.
The report, captured in the EmPower publication, fingered the distribution companies (DisCos) in the challenges impacting the viability and progress of Nigeria’s electricity industry.
Highlighting the strategic and operational challenges in the Nigeria Electricity Supply Industry (NESI) and proffering solutions, the report noted that the Nigeria’s electricity supply industry has a financing challenge, adding that the capital structure of acquisition, debt and expansion financing posed a challenge for infrastructure assets operated in a regulated utility.
“The sector has had challenges, raising the required long-term patient capital aligned to the long-lived infrastructure assets. As a result, it has been a challenge for the companies to service debts, meet the necessary rehabilitation and expansion commitments, improve efficiencies, and simultaneously pay their upstream invoices to other market participants and administrative entities.”
The newspaper says that stakeholders, yesterday in Abuja, raised serious concern over loopholes in revenue collections and remittances to government accounts by Federal Government agencies, a development, which may have resulted in over $1.3 billion (N540 billion) and another N670 billion unremitted revenue from the oil and gas sector alone.
Lapses by government agencies, lack of monitoring and undue advantage given to some companies operating in the country, especially in the free trade zones, equally worried the experts who gathered at the Growth Initiatives for Fiscal Transparency (GIFT) organised by OrderPaper Advocacy Initiative.
The House of Representatives Committee on Public Accounts (PAC), represented at the event by its chairman, Busayo Oluwole Oke, disclosed that the Nigerian National Petroleum Company (NNPC) Limited have questions to answer over oil and gas revenue hovering at $2.3 billion.
According to him, the funds were unremitted between 2014 and 2019 and included delayed payments by customers without evidence of any surcharge for the delays to the tune of $510,020,921.79; incomplete payments by customers totaling $6,203,863.68 and another outstanding payments by customers standing at $80,452,746.83.
The PAC chairman, pointing to audited documents by the country, noted that $235,685,861.31 was transferred to an undisclosed escrow account – due from the sales of gas to NLNG, adding that there was unexplained shortfall on NLNG balances standing at $18,389,334.23 and payment for gas exports of $346,211,227.59 through NGL Funding Account instead of the Federation Account.
According to him, there was equally $2,664,047.64 unexplained and unsubstantiated foreign exchange losses on sums paid into the Federation Account while sales without payment status, payment details or payment confirmation from the national oil company stood at $9,389,105.80.
The Punch reports that the Nigerian Investment Promotion Commission has disclosed in its report that investment commitments declined from $8.41bn in the first quarter of 2021 to $2.58bn within the same period in 2022.
This shows that investment commitments declined by 69.32 per cent from Q1 2021 to Q1 2022, according to the Report of Investment Commitments in Nigeria (January to March 2022) by the NIPC.
According to the report, the investment commitments in Q1 2022 cut across 33 projects and five states, alongside the Federal Capital Territory.
In this period, the manufacturing sector attracted the highest investment commitments of $1.1bn, which is 45 per cent of the total commitments. It is followed by the agriculture sector with $0.64bn, which is 25 per cent of the total commitments.
Sokoto State attracted the highest investment commitments of $1.05bn, which is 41 per cent of the total commitments. It is followed by Lagos State with $0.88bn, which 34 per cent of the entire commitments.
About $1.13bn investment commitments came from Nigerian investors, which is 44 per cent of the whole commitments.
The United States investors made $1.01bn investment commitments, which is 39 per cent of the entire commitments in Q1 2022.
Economists have decried the effect of insecurity on the economy, stating that it is discouraging investments in the country.
The newspaper says that there were strong indications on Wednesday that the All Progressives Congress national officials were divided over a plan by the President, Major General Muhammadu (retd.), to pick his preferred presidential candidate for the party.
Earlier on Wednesday, the APC National Vice Chairman (North-West), Mallam Salihu Lukman, in an open letter to Buhari, warned that picking a successor would be costly and risky for the President and the party.
But two members of the party’s National Working Committee – the Deputy National Secretary, Festus Fuanter, and the National Legal Adviser, Ahmed El-Marzuq, in separate interviews with The PUNCH disagreed with Lukman.
Also, feelers from a meeting of the APC governors’ meeting on Tuesday night indicated that the governors could not agree on a consensus and the fact that the President should pick the party’s presidential candidate.
It was also learnt that the committee, which screened the party’s presidential aspirants, would submit its report to the National Chairman, Abdullahi Adamu, on Thursday (today).
Buhari, in an interview with Channels Television in January, said he had a favourite candidate, whom he said he would keep to himself.
On Tuesday, the President, who explained the qualities his successor must possess, sought the backing of the APC governors in picking the party’s presidential candidate.
The Nation reports that shortage of oil refineries across sub-Saharan Africa coupled with soaring crude prices because of the war in Ukraine has left countries dangerously short of fuel supplies, disrupting airlines and causing queues at filling stations Reuters survey has shown.
The surge in prices comes in tandem with a spike in the cost of food after Russia sent troops into Ukraine, hitting 10s of millions of people already living in precarious conditions, as well as government and aid agency budgets. Refineries across sub-Saharan Africa combined can process 1.36 million barrels of oil a day (bpd), in theory, but with many out of action, only 30 per cent of that capacity was used last year, according to independent consultancy CITAC.
Refineries in Cameroon, Ghana and Senegal are shut, as are four in South Africa. Africa’s biggest oil producer, Nigeria, pumps over 1.3 million barrels a day, but the two privately-owned plants still running there can only process one per cent of that.
The African Export-Import Bank and the African Petroleum Producers’ Organisation signed a deal last month to create a multi-billion-dollar “energy bank” to boost private investment in the sector but analysts say there are few quick fixes on the horizon.
Fuel shortages are also hitting Western nations, but the impact in Africa is expected to be long- lasting as governments and companies are less able to afford the sky-high cost of imported fuel, or come up with the millions of dollars needed to get refineries running again at full tilt. “It is likely that the situation may get much worse in the short term,” Anibor Kragha, Head of the African Refiners & Distributors Association (ARDA), told Reuters.
Big Western oil companies have been withdrawing from refinery projects in Africa in recent years and local investors and governments have largely failed to plug the gap, leading to a chronic lack of investment in modernising facilities.
GIK/APA