As concerns continue to grow over the implementation of the new electricity tariffs across the country, a report has shown that the Nigerian power sector is responsible for over N100 billion non-performing loans in the country.
According to the data obtained from the National Bureau of Statistics (NBS), the power sector ranks among the sectors with the largest non-performing loans in the banking sector.
The Breakdown: As at the end of April 2019, the total loan portfolio by domestic and foreign components was put at N15.4 trillion, while the Non-Performing Loans (NPFLs) stood at N1.67 trillion. This means NPFLs account for 10.3% of total loans.
- A close look into the data shows that in terms of the total loan obtained, the power sector ranks 7th, while the sector ranks 5th in terms of non-performing loans.
- Overall, the top 8 sectors with the biggest non-performing loans include oil and gas (N871.17 billion) general commerce (N166.86 billion), general (N151.12 billion) and manufacturing (N113.82 billion).
- Others are power and energy (N100.47 billion), information and communication (N75.98 billion), real estate activities (N65.87 billion) and construction (N59.73 billion).
Non-Performing Loans (NPFLs): Non-performing loans constitute one of the most serious liquidity barriers facing the Nigerian banking sector. Bank loans are regarded as risk assets because the monies advanced as loans by the banks belong to depositors. The risk arises in the event of massive defaults. Depositors’ monies could become available on-demand.
The huge amount of NPFLs in the economy has gained wide-spread criticism. This has also become a cause of concern for commercial banks whose stability in the face of reeling economic downturns is uncertain.
Some developments: Recently, President Muhammadu Buhari assented to a new Act that gives the Asset Management Corporation of Nigeria (AMCON) more power to enforce recovery of debt from prominent Nigerians and corporate organisations.
- Basically, AMCON was set-up by the Federal Government in 2010 to acquire non-performing loans from banks in order to ensure the viability of the country’s financial sector.
- AMCON has also concluded plans to release a TV documentary on prominent Nigerians who owe the larger part of the N5 trillion debt, stating that the debtors are top public office holders in the country.
Electricity hike: On Thursday, the Federal Government through the Nigerian Electricity Regulatory Commission (NERC) announced an increase in tariffs payable by power consumers across the country with effect from 2020. While Nigerians have raised several concerns, the tariff review appears to be the only measure that will encourage investors to bring in the largely needed investments which have been lacking in the sector.
According to various documents obtained from the NERC on Wednesday in Abuja, beginning from 2020, power consumers in Nigeria will have to pay an additional sum of between N8 and N14 for every kilowatt-hour of energy provided by their respective distribution companies (DisCos).
While this has attracted wide criticisms from Nigerians, power sector stakeholders see this as unavoidable due to cash constraint and liquidity crises in the face of the huge non-performing loans. In a bid to make up for the shortfall experienced in the sector, the Federal Government on Wednesday, September 23, 2019, approved the disbursement of N600 billion intervention fund into the country’s electricity market.
Stakeholders’ concerns: The Managing Director of the Transmission Company of Nigeria (TCN), Dr Usman Gur Mohammed earlier disclosed that electricity tariff might be increased as banks appear very reluctant to give further credit to the power sector because of inappropriate pricing of electricity tariff, liquidity challenge and inadequate capital especially among the distribution firms.
Reacting to the new electricity tariffs, the Director–General, Lagos Chamber of Commerce and Industry, LCCI, Mr Muda Yusuf, stated that the tariff review is clearly inevitable.
“The reality is that private investments in the privatized power sector have severe liquidity challenges. Practically, all assumptions that informed the investment in the first place have broken down.
“The current model of static tariffs in the face of escalating cost simply cannot work. If the sector has to remain with the private sector, tariff review is clearly inevitable. This, however, does not diminish the fact that the private investors perhaps did not do proper due diligence before taking over the sector
“There were financial and technical capacity issues. For the end-users, if a steady supply of power can be guaranteed, paying more for power is a sacrifice worth making. It would still be cheaper than depending on diesel or petrol generators. Besides, it would be better for the environment.”
However, the Directo- General, Manufacturers Association of Nigeria (MAN), Segun Ajayi said, “The recent increase in electricity tariff is rather unfortunate, giving the circumstances private businesses are facing and the fact that there is no indication that, going by the enormity of the challenges confronting the privatized power sector, there would be commensurate improvements in quality and hours of supply.”
Lagos shuts 3 container terminals, hotel in Amuwo Odofin, seals 17 buildings in Lekki
The government has moved to seal illegal terminals and unapproved structures in the state.
The Lagos State Government has moved to stop activities of the illegal container terminals with the sealing up of 3 illegal locations along Festac Link Bridge, Amuwo Odofin. This also includes the one used for batching sand underneath the bridge, among others.
The state government, in its continued clampdown on illegal structure, sealed off 17 buildings at Oniru Estate, Lekki and several others along Oniru Beach. It also sealed the Festival Hotel and a 9-floor serviced apartment illegally renovated in Amuwo Odofin.
This disclosure was made by the Lagos State Commissioner for Physical Planning and Urban Development, Dr. Idris Salako, while supervising the sealing off of the facilities, in the company of the Special Adviser to the Governor on Urban Development, Ganiyu Adele Ayuba, and Permanent Secretary of the ministry, Arc. Foluso Dipe.
Salako noted that the existence of container terminals and docks must be controlled in order to forestall abuse of the physical environment and ensure environmental sustainability.
He explained that the container terminals, some of which also operated unapproved docks, are located indiscriminately in apparent contravention of the Lagos State Urban and Regional Planning Law 2019 which stipulates that prospective developers must obtain Planning Information and Planning Permit as necessary conditions for locating such facilities.
While ordering the removal of the container trucks along Festac-Mile 2 link-bridge, the Commissioner said that the State Government would not condone the existence of illegal terminals or similar facilities across the metropolis in view of their impacts on the infrastructure and natural resources of the State.
Salako urged anyone interested in setting up such facilities to approach the Ministry of Physical Planning and Urban Development for Planning Information, which would give informed advice on approvable locations, and also obtain a Planning Permit from the Lagos State Physical Planning Permit Authority (LASPPPA).
The Lagos State Government, on Thursday, sounded a note of warning to all illegally operated container terminals in the State as it sealed three illegal locations along Festac Link-Bridge, Amuwo-Odofin, including the one used for batching sand underneath the bridge, among others. pic.twitter.com/KuekLY5pXG
— The Lagos State Govt (@followlasg) September 18, 2020
COVID-19 Update in Nigeria
On the 18th of September 2020, 221 new confirmed cases and 1 death were recorded in Nigeria.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 56,956 confirmed cases.
On the 18th of September 2020, 221 new confirmed cases and 1 death were recorded in Nigeria, having carried out a total daily test of 2,609 samples across the country.
To date, 56,956 cases have been confirmed, 48,305 cases have been discharged and 1,094 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 482,321 tests have been carried out as of September 18th, 2020 compared to 479,712 tests a day earlier.
COVID-19 Case Updates- 18th September 2020,
- Total Number of Cases – 56,956
- Total Number Discharged – 48,305
- Total Deaths – 1,094
- Total Tests Carried out – 482,321
According to the NCDC, the 221 new cases were reported from 18 states- Lagos (59), Abia (46), FCT (22), Gombe (20), Plateau (17), Rivers (11), Bauchi (7), Benue (6), Ekiti (6), Imo (6), Kaduna (4), Kwara (4), Ondo (4), Ogun (3), Osun (3), Bayelsa (1), Edo (1), Kano (1)
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 18,827, followed by Abuja (5,526), Oyo (3,226), Plateau (3,192), Edo (2,611), Kaduna (2,326), Rivers (2,220), Delta (1,799), Ogun (1,758), Kano (1,734), Ondo (1,594), Enugu (1,234), Ebonyi (1,035), Kwara (1,013), Abia (881), Katsina (845), Osun (810), Gombe (799), Borno (741), and Bauchi (689).
Imo State has recorded 557 cases, Benue (473), Nasarawa (447), Bayelsa (394), Jigawa (322), Ekiti (313), Akwa Ibom (288), Niger (250), Anambra (232), Adamawa (230), Sokoto (161), Taraba (95), Kebbi (93), Cross River (85), Zamfara (78), Yobe (73), while Kogi state has recorded 5 cases only.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.
On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.
Fire guts fuel tanker, vehicles at Anthony, Lagos
The tanker conveying PMS lost control while in motion and subsequently fell sideways.
There is a fire outbreak, which has gutted a fuel tanker, at Anthony inward Gbagada, Lagos State.
This was disclosed by the Federal Fire Service via its Twitter handle on Friday evening. The incident, which occurred around 10 pm, has razed at least two vehicles.
First responders and other Emergency agencies are already at the scene of explosion in Anthony, Lagos State, Nigeria. Please avoid the area, take alternative routes.
— Federal Fire Service (@Fedfireng) September 18, 2020
The agency urged road users to avoid the area and take alternative routes.
Also, the Director-General of the Lagos State Emergency Agency, Dr Olufemi Oke-Osanyintolu, confirmed the incident.
He said, “The Agency responded to distress calls and upon arrival at the scene of incident, it was discovered that a tanker with unknown registration number conveying PMS lost control while in motion and subsequently fell sideways.
“This led to an explosion in which two unidentified vehicles were burnt.”
A joint team of responders led by the Federal Fire Service, LASEMA, LASG fire service, LRU fire unit, Nigeria Police and LASTMA are working together to curb the inferno from escalating further.
Details soon …