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Concerns as Nigeria’s power sector decade privatization deal expires

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Growing concerns have arisen as Nigeria’s power sector privatization process, set to conclude on October 31, 2023, approaches its end. The situation has become even more problematic due to the persistent crisis in Nigeria’s power sector, which has plagued the electricity value chain, spanning generation, transmission, and distribution, for over 62 years.

In an attempt to address the long-standing issues within the country’s ailing power sector, the government initiated the process of privatization, commencing with the 2005 Electric Power Sector Reform (EPSR) Act. This process officially began on November 1, 2013, with the hope of resolving the enduring power crisis.

However, a decade later, the power industry’s problems remain unresolved, obstructing progress in Nigeria’s economy. Electricity distribution companies continue to grapple with financial challenges and inadequate remittances, compounded by a lack of proper metering. Meanwhile, power generation companies struggle with insufficient investments and transmission inefficiencies, resulting in frequent grid failures.

Despite these challenges, Nigeria has been struggling to provide just 5,000 megawatts of electricity daily for a population of over 200 million people. According to the Nigerian Electricity Regulatory Commission (NERC), the generation capacity of the 26 power plants dropped to 4,387.91MW in the second quarter of 2023. Additionally, the power sector has experienced significant annual capacity payment losses, with figures reaching as high as N273.32 billion in 2016 and as low as N88.13 billion in 2022.

The government has intervened at various times, including providing loans and power assurance guarantees, yet the power industry continues to face challenges, which have adversely affected the economy. For instance, the Manufacturing Association of Nigeria revealed that its members lose N10.1 trillion annually due to the power sector crisis.

The signing of the 2023 Electricity Bill on June 9 by President Bola Ahmed Tinubu has raised hopes that meaningful change can occur in the sector if it is effectively implemented. However, the Minister of Power, Adebayo Adelabu, must provide the necessary policy direction to drive this change.

Wumi Iledare, Professor Emeritus and Executive Director of the Emmanuel Egbogah Foundation, highlighted the significance of the 2023 Electricity Act and stressed the importance of its proper implementation. He recommended decentralization of the power sector, with robust regulatory institutions at both state and federal levels.

Kunle Olubiyo, the President of Nigeria Consumer Protection Network, criticized the power sector privatization framework and emphasized the need for a regulatory review to address the sector’s challenges as the Performance Agreement and Licensee Moratorium expires.

Adetayo Adegbemle, Convener and Executive Director of PowerUp Nigeria, underscored the importance of reviewing the power sector privatization agreement to reposition the industry. He pointed out the need to address critical issues such as consumer metering and improving the balance between generation, transmission, and distribution.

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BREAKING: Oronsaye Report: Tinubu to scrap many agencies, merge others

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President Bola Tinubu will implement some of the recommendations contained in the Oronsaye Report.

This is majorly, in order to cut the cost of governance.

This is coming 12 years after the Steve Oronsaye Panel submitted its report on restructuring and rationalising Federal government parastatals and agencies and a white paper issued two years after.

According to Bayo Onanuga, the President and the Federal Executive Council on Monday reached a decision to implement the report.

He said: “Many agencies will be scrapped and many others will be merged, to pave the way to a leaner government.”

CREDIT: DAILY POST

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‘You’re responsible for Nigeria’s economic woes’— Atiku tackles Tinubu

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Atiku Abubakar, the Peoples Democratic Party (PDP) candidate in the 2023 general election, attributed Nigeria’s economic challenges to President Bola Ahmed Tinubu.

In a statement shared on his official social media account on Sunday, the former Vice President of Nigeria urged Tinubu to take cues from Argentina’s President Javier Milei on swiftly restoring investor confidence despite inheriting a troubled economy.

Atiku criticized Tinubu for deflecting blame onto the opposition and his predecessors, calling such actions unnecessary and shortsighted. He emphasized that market dynamics respond to concrete actions, not political rhetoric.

Drawing parallels with President Milei’s leadership in Argentina, Atiku highlighted the need for well-sequenced economic reforms. He commended Milei’s proactive approach in preparing for the post-reform challenges and ensuring the availability of mitigating measures.

Atiku contrasted Tinubu’s administration’s ad hoc and hurried reforms with Milei’s strategic sequencing. He pointed out Argentina’s lean government structure achieved through reducing ministries and privatizing state-owned enterprises, contrasting it with Nigeria’s expanding bureaucracy and excessive spending on official residences.

Atiku likened Tinubu’s administration’s approach to Nero fiddling while Rome burns, accusing him of evading substantive action and blaming the opposition for policy failures, reminiscent of characters in George Orwell’s Animal Farm.

Expressing admiration for Argentina’s reforms, Atiku suggested aligning his “Recover Nigeria Plan” with Milei’s stabilization strategy to alleviate Nigeria’s economic distress. He emphasized the need for transparent policies focused on economic revival and warned against dismissing discontent, particularly among the youth, which could manifest in protests.

The statement referred to the worsening economic conditions in Nigeria, highlighted by soaring inflation rates and high living costs, as reported by the National Bureau of Statistics, with headline inflation reaching 29.90% and food inflation at 35.42% in January 2024.

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BREAKING: Fire guts FCT Minister’s residence

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A fire broke out at the private residence of Dr. Mariya Mahmoud, the Minister of State in the Federal Capital Territory Administration (FCTA), on Sunday afternoon.

Situated at No. 9, Justice Roseline Ukeji Close in the affluent Asokoro district of Abuja, the property was reportedly completely destroyed by the blaze.

Despite prompt emergency response efforts, including the arrival of fire service personnel, nothing could be salvaged from the premises.

Mr. Austin Elemue, the Minister’s Special Adviser on Media, confirmed the incident, indicating that the cause of the fire remained unknown at the time.

Authorities have initiated an investigation to ascertain the cause of the fire.

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