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FG, Siemens Sign 25,000MW Electricity Deal

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  • No middlemen will be involved, Says Buhari  

By Mathew Dadiya, Abuja

In its continuous effort to address the epileptic power supply in the country, the Federal Government of Nigeria and German -based electricity giant – Siemens on Monday, signed an agreement to boost power supply from current 5000MW to 25,000MW by 2025.

President Muhammadu Buhari while speaking shortly after a signature ceremony for the deal said that the goal of his administration was simply to deliver electricity to Nigerian businesses and homes.

 

Buhari said that his administration’s priority was to stabilise the power generation and gas supply sector through the Payment Assurance Facility, which led to a peak power supply of 5,222 MW.

Nonetheless, the President noted that the constraints remained at the transmission and distribution systems.

He said: “This is why I directed my team to ask Siemens and our Nigerian stakeholders to first focus on fixing the transmission and distribution infrastructure – especially around economic centres where jobs are created.

“Whilst it was evident that more needed to be done to upgrade the sub-transmission and distribution system, our Government was initially reluctant to intervene as the distribution sector is already privatised. 

“I am therefore very pleased with the positive feedback from private sector owners of the distribution companies, who have all endorsed Government’s intervention to engage Siemens on this end-to-end plan to modernise the electricity grid.”

The president said that his challenge to Siemens, Nigeria’s partner investors in the Distribution Companies, the Transmission Company of Nigeria and the Electricity Regulator is to work hard to achieve 7,000 megawatts of reliable power supply by 2021 and 11,000 megawatts by 2023 – in phases 1 and 2 respectively. 

“After these transmission and distribution system bottlenecks have been fixed, we will seek – in the third and final phase – to drive generation capacity and overall grid capacity to 25,000 megawatts. 

“With our strong commitment to the development of Mambilla Hydroelectric and the various solar projects under development across the country, the long-term power generation capacity will ensure adequate energy mix and sustainability in the appropriate balance between urban and rural electrification. 

“Our intention is to ensure that our cooperation is structured under a Government-to-Government framework,” he added.

President Buhari warned that no middlemen will be involved, so as to achieve value for money for Nigerians. 

He insisted that all products be manufactured to high quality German and European standards and competitively priced.

This project, however, President Buhari acknowledged would not be the solution to all nation’s problems in the power sector. 

But he expressed confidence that it has the potential to address a significant amount of the challenges we have faced for decades. 

Meanwhile the Global Chief Executive Officer of Siemens, Joe Kaeser, who spoke to State House Correspondents after the meeting that the road map will enable Nigeria delivers the country’s capacity of power in the first phase of 7,000, second phase up to 11,000 and third phase 25,000 megawatts. 

Kaeser said: “That will significantly enhance the country’s power supply and gets the country to the next industrial phase. We believe we will all very much benefit together, the people of Nigeria and of course Siemen as a company.

“I’m very honured that we were able to sign this road map today in the presence of President and our partners. I will personally make sure that this will be the big success of Nigeria, Siemen and our partners in the country.”

On the cost of the project and how long it will last, Kaeser said: “we have really talked about solutions and how it can bring power to the people literally, from generation to transmission and effective distribution. Yes, we have been talking money at this time because this about a long term partnership and is a road map which we are going to work all the way till 2025.

“The first phase is suppose to be done by 2021, second phase till end 2022 and the final phase by 2025.”

Also, the Director General of Bureau for Public Enterprises (BPE), Alex Okoh, while fielding questions from State House Correspondents, described the partnership as credible.

He said what has been done so far is the technical evaluation from both the transmission and distribution to know what the gaps are, to essentially understand what the gaps are in terms of the technical infrastructure to improve the transmission and distribution capacity.

Okoh said that the next phase is to do the detailed commercials and see costing of what the Siemen intervention will entail before they will agree on the financial frameworks to domiciled the financial commitment within the books of the DISCOS. 

“If you look at the amount of losses that is being experienced in the entire power sector, there are huge. We are talking about double digits losses between 30 percent and in some DISCOS almost 70 percent ATC and C losses. So that is a strong signal that the way the market is currently structured is not sustainable and if we don’t improve the critical infrastructure in terms of the winning capacity of TCN and also the distribution capacity of the DISCOS, then this kind of situation will persist for a long time. 

“That is why we welcome this intervention and we believe that within the timelines that have been directed by Mr. President, we will be able to significantly improve power supply in the country.”

Economy

Domestic Securities Market a Major Source of Funding for FG – DMO

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The Debt Management Office (DMO), says the Nigerian domestic securities market remains a major source of funding for the Federal Government.

The Director-General of the DMO, Patience Oniha, said this on Monday in Lagos at an interactive session with primary dealers in the Federal Government securities market.

According to Oniha, during COVID-19, when the international markets were closed, we were able to raise the full amount needed to fund the budget.

“Last year, we raised seven trillion Naira as new domestic borrowing. It speaks to the size of the domestic market, its resilience, and its sophistication, unlike we have in many African markets,’’ she said.

Oniha said that the 2024 budget had a deficit of six trillion Naira to be financed through new domestic borrowing.

She said that the National Assembly also approved N7.3 trillion Ways and Means for securitisation.

“Out of the new domestic borrowing of six trillion Naira, we have raised N4.5 trillion. For the Ways and Means, out of seven trillion approved for securitisation, we have raised N4.905 trillion.

“The financial sector has come a long way, and this is another strategic meeting to chart a way forward,’’ Oniha said.

Mrs Nadia Zakari, the President, Financial Market Dealers Association (FMDA), said that the Nigerian business environment was evolving and unique, necessitating such interactive sessions.

According to Zakari, such sessions are critical for both market operators and the Federal Government for them to be able to make decisions as they plan for the rest of the year.

“We stand as financial intermediaries, and we are in a very important position of interacting with other market operators, the end investors and the DMO,’’ she said. (NAN)

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Business News

CBN Unveils Strategy to Boost Remittances, Grants AIP To 14 New IMTOs

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By Tony Obiechina, Abuja 

The Central Bank of Nigeria (CBN) has activated plans to double foreign-currency remittance flows through formal channels by granting 14 new International Money Transfer Operators (IMTOs) Approval-in-Principle (AIP).

This was disclosed in Abuja on Wednesday, by the Bank’s Acting Director of Corporate Communications, Mrs.

Hakama Sidi Ali, who stated that the initiative will help increase the sustained supply of foreign exchange in the official market by promoting greater competition and innovation amongst IMTOs to lower the cost of remittance transactions and boost financial inclusion.
 

She said, “This will spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira.

“It will be recalled that the CBN Governor, Mr. Olayemi Cardoso, had recently declared: “We’ve set ourselves a target to double remittance flows into Nigeria within a year, a goal I firmly believe is within reach. 

“We are wasting no time driving progress to remove any bottlenecks hindering flows through formal channels permanently. We have a determined pathway and a sequenced approach to tackling all challenges ahead, working hand in hand with key stakeholders in the remittance industry,” she stated.

Continuing, Sidi Ali, said that the CBN viewed increasing formal remittance flows—one of the major sources of foreign exchange, accounting for over 6% of GDP—as a means of reducing the historical volatility in Nigeria’s exchange rate caused by external factors, such as fluctuations in foreign investment and oil export proceeds.

The increase in the number of IMTOs is one of the primary actions initiated by the CBN’s remittance task force, overseen by Governor Cardoso as a collaborative unit pulling together specialists to work closely with the private sector and market operators to facilitate the ease of doing business in the remittance ecosystem in Nigeria. 

The task force was established as a direct result of an executive learning session with IMTOs during the World Bank/IMF Spring Meetings held in Washington DC, United States of America, in April 2024. The task force will meet regularly to implement strategy and monitor the impact of its measures on remittance inflows.

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Economy

FG Vows To Ensure Continuous Flow of Tax Revenue – Madein

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By Tony Obiechina, Abuja 

The Federal government is committed a tax culture that will ensure the continuous flow of revenues into government coffers, the Accountant General of the Federation, Dr Oluwatoyin Madein has said.

Madein stated this at the 26th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN) in Abuja, with the theme: “Sustainable Tax Culture and Economic Roadmap for Nation Building”.

Madein said, “Like the CITN, the Office of the Accountant-General of the Federation is committed to a sustainable tax culture that will ensure the continuous flow of revenues even at an improved level.

“Tax revenue as at today is the highest source of revenue accruing to the federation.

Therefore at the Federation Account Allocation Committee meetings we eagerly await the numbers coming from the FIRS because the performance keeps on increasing and brings succour to all tiers of government.”

She charged tax practitioners to work harder in getting more revenue from taxes, stressing that tax revenue is currently the highest income source for the federation.

The government noted that based on the current high revenue from taxes, members of the Federation Accounts Allocation Committee were always looking forward to the figures from the Federal Inland Revenue Service every month, in order to have funds to share to the three tiers of government.

“Tax revenue as at today is the highest source of revenue accruing to the federation. Therefore at the Federation Account Allocation Committee meetings we eagerly await the numbers coming from the FIRS because the performance keeps on increasing and brings succour to all tiers of government”, she added. 

FIRS exceeded its 2023 revenue target by N816bn, as its total actual revenue collection for last year stood at N12.37tn, outperforming the N11.56tn target.

This is contained in a presentation by Amina Ado, Coordinating Director of Special Tax Operations Group at the FIRS.

The accountant-general tasked tax practitioners to step up efforts in collecting taxes, so as to shore up more revenue for the government to provide infrastructure and other amenities.

Madein said, “Let us remain steadfast in our commitment to building a better future for all. Together we can harness the transformative power of taxation to create a more prosperous, equitable and sustainable world.

“Like I said earlier, at FAAC we eagerly look forward to tax numbers because at the moment revenue from non-oil has been a great revenue source to the federation.

“Therefore, to tax practitioners, you are doing so well, but we need more of this to be able to deliver on all the areas that the citizens are looking forward to, because for even infrastructure development, it is only through funds that we can get it done.”

She further stated that it was her strong belief that “the conference will go a long way to deepen the collaboration between our organisations in building capacity for all the professionals, experts and tax payers for better understanding of the tax laws, rules and regulations.”

In his remarks, the President/Chairman of Council, CITN, Samuel Agbeluyi, pointed out that the withdrawal of subsidies on fuel and electricity had reduced the purchasing power of the masses.

He noted that raising electricity tariff for a selected band after fuel subsidy was withdrawn “is going to reduce the purchasing power of the masses. So we urge govt to consider these actions on the masses.

He, however, stated that the institute was happy to know that President Bola Tinubu had asked the Central Bank of Nigeria to slow down on the recent cybersecurity levy that was approved by the apex bank.

“We will continue to advise the govt on its policies, considering how these polices affect the citizens,” Agbeluyi stated.

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