Abimbola Abatta and Ariemu Ogaga
The Federal Government has received knocks and condemnation owing to its continuous export of electricity to Togo, Niger, Benin despite the inability of these countries to pay N5.8bn electricity debt and failure of the federal government to settle $1billion legacy debt being owed suppliers of natural gas.
According to the report for 2020 released by the Nigerian Electricity Regulatory Commission (NERC), the companies for each of the countries are Societe Nigerienne d’electricite (SNE), Societe Beninoise d’Energie Electrique (SBEE) and Compagnie Energie Electrique du Togo (CEET) respectively.
The remittances showed that the Nigerian Market Operator (MO) gave the countries N16.31bn from which they paid N10.45bn for the services received from MO, while N5.86bn was outstanding.
The condemnation is coming amid the government’s failure to pay up the $1bn legacy debts owed gas producers for gas supplied to thermal power generating companies.
Nigerian NewsDirect reports that the legacy debts amount to about $1 billion.
Recall that gas producers, through the Managing Director of Shell Gas Limited and President of the Nigerian Gas Association (NGA), Mr. Ed Ubong, had registered their displeasure over the debt the Federal Government is owing them.
Ubong who disclosed this at the recent Nigerian Oil and Gas Conference and Exhibition (NOG) 2022 in Abuja, said that defraying the debt in addition to introducing a free market pricing regime for the gas sector would guarantee the continuous operation of thermal power generating companies in the country.
However, in an attempt to justify why Nigeria exports electricity to Niger, Benin, and Togo, the Transmission Company of Nigeria (TCN) has said the deal provides avenue to earn more foreign exchange for national development.
Managing Director, TCN, Sule Abdulaziz, confirmed this recently at the Nigerian Power Consumers Forum that, “Nigeria, through TCN, had been exporting electricity to Niger, Benin and Togo under a country-to-country arrangement.”
Abdulaziz, who is also the Chairman, Executive Board of West African Power Pool (WAPP), said TCN has deployed a high technology scheme as a stop-gap solution called Internet of Thing (IoT) and Virtual Private Network (VPN) to improve the national grid.
The technology, according to him, would improve real-time operations of the national grid, pending the deployment of a long-term network automation system.
In his words, “We have gone far with the procurement of new Supervisory Control and Data Acquisition (SCADA)/Energy Management System (EMS) schemes, but we felt as a responsible company that is waiting for the new SCADA, we can deploy a stop-gap technology which we have understudied in other countries to be very efficient in boosting real-time electricity grid monitoring.”
The TCN boss said that with the improved collaboration of other players in the electricity value chain, the company had been able to reduce cases of system collapse.
Abdulaziz noted that TCN was building two new National Control Centres in Abuja and Osogbo which would further improve the robustness of the Nigerian electricity grid.
According to him, the National Control Centre and other technology systems will improve the stability of the national grid.
Meanwhile, in reaction to the development, stakeholders have stressed that Nigeria has refused to see that it does not have the financial muscles and wealth it used to pride in.
In a chat with Nigerian NewsDirect on Sunday, an energy Agroconsultant and foremost Nigeria Bamboo Expert, Mr Eleojo Joseph faulted the continued implementation of the bilateral agreement, describing the situation as ‘father Christmas attitude gone wrong.’
According to him, “The legacy debt and continuous supply of electricity to Togo, Benin and Niger is actually the fallout of bilateral relations we had with these countries in the 1970s during the Gowon administration and our ‘Father Christmas’ attitude gone wrong.
“We had an understanding with Niger Republic not to dam the River Niger due to the effect it will have on us in Nigeria and in return we will dam it on our side and in return supply them electricity and they pay an agreed fraction of the bill.
“What happened over the years that Niger Republic and the other countries are owing us $1bn is due to incompetence, corruption and what I termed ‘dirty bureaucracies.’
“River Niger route is from Mali-Niger-Benin then Nigeria. Why Togo? So you can clearly see the Father Christmas mentality by Nigeria. Nigeria has refused to realise that it does not have the financial muscles of the 1970s anymore and still deluding herself as a rich nation. A pointer is the vehicles bought for Niger Republic lately.
“It is about time Nigeria call a meeting with these countries and let them know the true realities on ground. In a situation whereby the electricity supply is not even enough for local consumption and you allow yourself to be blackmailed by Niger and Benin Republic on the damage for electricity supply? It is about time we review some of these agreements and come up with a more practical solutions. Why on earth are we selling electricity to Togo?
“Importance of electricity to the economy: The importance of electricity cannot be over emphasized. What can anybody or economy do without electricity? Electricity is life. Electricity and water goes hand in hand. With electricity everything will work seamlessly. The continuous rise of the dollar to Naira is a fallout of lack of production at home. An economy that is not producing is a consuming one. A consuming economy is a dying economy,” he stated.
On his part, CEO Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf said effective engagement among countries would yield positive outcomes.
According to him, “It is important to situate the matter in a proper context. The whole idea of exporting electricity to these countries was to prevent the countries from contructing dams along the river niger which is the main feeder of our hydro power plants in the country.
“It was a compromise reached in time past. But this should not be a reason for the countries to fail in their obligations to Nigeria.
“I believe an effective engagement of these countries should yield positive outcomes,” he stated.
Divestments: Foreign investors cite harsh operating environment as reason for exit, pull out N310bn assets
Foreign investors have cited a harsh operating environment as reasons for their exit from the Nigerian market.
Recall that President Bola Tinubu had in his inauguration speech in May and also in August assured investors of his dedication to revitalising the nation’s economy by intensifying the removal of all bottlenecks obstructing efficient business establishment and management in Nigeria.
However, since the President came on board, the country has witnessed over four major foreign investors in the manufacturing and oil and gas sector exiting the country in droves citing high operational costs and unfavourable business climates as some of the reasons for their exit.
The latest exit announcement was made yesterday by Procter & Gamble (P&G) a major global player in the Fast Moving Consumer Goods (FMCG) segment and Equinor, another global player in the upstream oil sector.
With these new exits, Nigeria’s economy is expected to lose $335 million (about N310 billion) in Foreign Direct Investments (FDI).
The amount represents the combined assets value of the two companies.
Procter & Gamble (P&G), an American multinational consumer goods company, says it has plans to transition from local production to solely importing its products as the firm winds down its on-ground presence in Nigeria.
Equinor is exiting after selling its Nigerian business, including its share in the Agbami oil field to Nigerian-owned energy company Chappal Energies.
Explaining the decision, Chief Financial Officer, P&G, Andre Schulten said the decision is a result of “the challenging business environment in Nigeria, as well as the difficulty in creating US dollar value.”
On his part, Equinor’s Senior Vice President for Africa Operations, Nina Koch, in a statement, said, “Nigeria has been an important part of Equinor’s international portfolio over the past 30 years.
“This transaction realises value and is in line with Equinor’s strategy to optimise its international oil and gas portfolio and focus on core areas.”
In the second half of this year two other major multinational companies, GlaxoSmithKline, GSK, Consumer Nigeria Plc and Sanofi-Aventis Nigeria Limited, a French pharmaceutical company, pulled out assets estimated at over $800 million from Nigeria, citing harsh operating environment.
Meanwhile, the Nigeria Employers’ Consultative Association (NECA) has blamed stringent regulatory and legislative activities, insufficient infrastructure, and policy inconsistencies for the difficulties faced by businesses.
Reacting to the exit of Procter & Gamble, P&G, NECA’s Director-General, Adewale-Smatt Oyerinde expressed dissatisfaction with the news.
He however, commended the Federal Government for supporting the Small and Medium Enterprises, SMEs, and manufacturers through the disbursement of the N125 billion Presidential Palliative Programme.
The DG said, “NECA commends the Federal Government for supporting the Small and Medium Enterprises (SMEs), and manufacturers through the disbursement of the N125 billion Presidential Palliative Programme.
“This strategic intervention is a proactive step in mitigating the impact of the multi-dimensional challenges currently being faced by businesses. It strongly emphasised the immediate need for decisive measures to halt the ongoing trend of companies divesting from the country.
“While we commend the Federal Government for the disbursement of the intervention funds, we urge a quick and definitive action to arrest the continuous exit and divestment of legitimate organizations in Nigeria.
“In the last few years, hitherto strong brands like GSK, Nampak and now P&G and some other local brands have either closed shop or divested fully or partially. These regrettable departures will persistently undermine the Federal Government’s efforts to attract Foreign Direct Investment, rendering its initiatives highly ineffective.
Highlighting the probable factors behind these business closures, the NECA boss asserted “that the challenging business landscape, marked by stringent regulatory and legislative activities, insufficient infrastructure, and policy inconsistencies, all conspired to exacerbate the difficulties faced by businesses.
“When established global brands like P&G cannot survive the environmental and regulatory onslaught, it is worrisome how many more businesses will capitulate.
“Regulatory bodies tasked with fostering business growth persist in prioritising revenue generation at the expense of their core mandate, while legislators, in the guise of oversight functions, consistently create impediments for organized businesses, hindering their operations.
“The contradictions and self-disruptive tendencies of many federal and state Institutions can only be imagined, as they negate the efforts of the President to attract Foreign Direct Investment.”
NECA implored President Bola Tinubu, as well as the Minister for Finance and the Coordinating Minister of the Economy, “to prioritise the survival of local businesses as the primary step before actively seeking Foreign Direct Investment.
“We advocate for the 2024 Appropriation Bill to address crucial infrastructural requirements conducive to business expansion, laying the groundwork for a prosperous nation.
“Additionally, he underscored the necessity of focusing on comprehensive tax reforms and addressing the challenges related to FOREX and exchange rates with a sense of urgency.”
CBN reviews service charter to drive ease of doing business
By Sodiq Adelakun
In a significant move to bolster the ease of doing business in Nigeria, the Governor of the Central Bank of Nigeria (CBN), Mr. Yemi Cardoso, has officially approved a revised “Service Charter” for the nation’s apex bank.
This strategic initiative is a direct response to the mandates of the Business Facilitation Act 2022, which aims to streamline business operations and enhance customer service delivery across the country.
The CBN announced on Thursday that the newly reviewed charter is designed to establish a clear framework for interactions between the bank and its external stakeholders. By adhering to the provisions of the charter, the CBN commits to aligning with the directives set forth by SERVICOM, the government agency responsible for promoting efficient and effective service delivery in public offices.
The implementation of the service charter is expected to mark a new era of transparency and accountability in the CBN’s operations, ensuring that the bank’s services are delivered in a customer-centric manner.
This development is anticipated to have a positive impact on the Nigerian business landscape, fostering a more conducive environment for both local and international investors.
Governor Cardoso’s endorsement of the service charter underscores the CBN’s dedication to upholding the principles of the Business Facilitation Act 2022 and its commitment to driving progress in Nigeria’s economic landscape.
“The document clearly outlines the bank’s mandates, vision, mission, and core values.
“It contains the list of services offered by the bank through its various departments and the service standards for each service.
“The service charter also includes a standardised customer complaints form for reporting service failures as well as a mechanism for addressing failures in any of the bank’s services,” it stated.
It added that the service charter reiterated CBN’s commitment to effective and prompt service delivery to its stakeholders and to its customers.
“It enables our customers to know the range of services provided by the bank as well as the standards at which these services would be provided.
“It equally states redress procedures in the event of service failure from any of our service windows.
“The charter applies to all stakeholders and customers of the bank,” it stressed.
In the foreword to the reviewed document, Cardoso reiterated CBN’s commitment to providing more responsive and citizen-friendly governance through quality service delivery that is efficient, accountable and transparent.
At UBA Business Series, e-commerce owners urge SMEs to prioritise delivering value
Seasoned business owners have advised Small and Medium Scale Enterprises (SMEs) owners and operators on winning tips that will help them run successful online businesses especially in the face of growing competition and challenging business terrain.
Speaking during the United Bank for Africa (UBA) Business Series hybrid event at the bank’s Head office in Lagos on Thursday, the entrepreneurs and E-commerce experts agreed that SMEs should start small and offer value-added services to their customers as these are essential factors to help them grow their businesses into successful empires.
The Chief Executive Officer, Konga.com, Nnamdi Ekeh, the Founder/CEO RenDoll Fashion Brand, Reni Abina, and Media Personality & Entrepreneur, Kaylah Oniwo were panellists at the event who spoke on the topic; E-commerce: the Effects of Online Retail.
“There is a need for proper documentation. Data is very important for business growth, as it gives you your conversion rates, and lets you know what to do to improve these rates to boost business patronage,” Ekeh said, as he emphasised that boosting security as regards payment options is also very important.
On her part, Abina advised E-commerce business owners and prospective owners to make use of reputable online influencers to promote their businesses, as she said, “It is important to find influencers in your field that are fitting to your brand and the kind of business you do.”
“It is important for business owners to know how their brands are being positioned; remember to track your growth properly as this will help you to know what you are doing right or wrong at every point in time,” Oniwo stated as she pointed out that the need for business owners to take the storytelling element of their business very important.
Together, all the speakers at the event noted that business owners should ensure that their businesses are duly registered, with functional business accounts as this gives a large amount of credibility to the company.
Speaking earlier, the Group Head, Marketing and Corporate Communications, Alero Ladipo, said UBA organises these business series frequently as they go a long way towards equipping customers with the much needed strategies to help build their businesses.
She said, “This year alone, we have had several conversations around business and health, personal finance and now, we are talking about e-commerce. To us as a bank, it is important that we have these conversations and the topic for this session is E-commerce, and is very important as we wrap up the year, because this is the season for giving and a lot of buying and selling will be going on during this period.
“As a financial institution that cares about its customers, UBA is interested in bringing in great speakers, experienced business people and thought leaders to educate its customers and Small business owners as they can then take the points discussed in these series and work with them to improve upon and positively impact their businesses,” she stated.
United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees’ group wide and serving over 35 million customers globally. Operating in 20 African countries and in the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology.
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