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Ban on generators: Throwing the baby with the bath water?

A bill for an act to criminalise the importation, selling and usage of generators in Nigeria scaled the first reading on the floor of the senate.

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#EndSARS: Senate President calls for end to protest after meeting with Buhari, Petroleum Industry Bill passes first reading in Senate, Unemployment: Senate calls for a state of emergency, President Buhari approves N37 billion for National Assembly renovation , National Assembly finally transmits Finance Bill after supremacy battle among lawmakers, VAT: Implementation won’t affect purchasing power of Nigerians, PIB: An unsurmountable obstacle, Senate passes CAMA bill, awaits presidential assent, Ban on generators: Throwing the baby with the bath water?

Yesterday, a bill for an act to criminalise the importation, selling and usage of generators in Nigeria scaled the first reading on the floor of the Senate. The bill was sponsored by Senator Birma Enagi from Niger State and he prescribed a 10-year jail term for importers and sellers of generators. However, the bill excludes importers of and sellers of generators meant for power essential services.

The exemption includes generators meant to serve medical purposes in healthcare facilities, airports, railway stations, elevators, escalators, research institutions and such facilities that require 24-hour electric power supply. The bill is intended to curb the menace of environmental pollution and force an improvement in power supply within the country.

Ban on generators: Throwing the baby with the bath water?

However, as expected, the bill is already being met with stiff opposition from major stakeholders. For example, the Lagos Chamber of Commerce and Industry (LCCI) challenged the Senate to focus on proferring solutions to fix the erratic state of power supply in the country rather than concern themselves with placing a ban on importation of generators into the country.

That said, we note that power supply in Nigeria ranks as one of the poorest across the globe. According to the World Bank, only 54.4% of Nigerians have access to any form of power supply as at 2017 which is below global average of 88.9%. It is important to note that the access enjoyed by the 54.4% Nigerians remains erratic and largely inadequate. Several businesses have been crippled by the cost of alternative power sources to run their businesses.

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The power sector in Nigeria is riddled with several challenges across the different segments of the value chain including generation, transmission and distribution. The generation phase of the power value chain has been riddled with inadequate gas supply and poor infrastructure to operate close to full capacity. The transmission system remains archaic and has recorded several total breakdowns which have hindered power generation as well as distribution.

Meanwhile, the distribution channel is currently combating inadequate metering, minimizing ATC&C losses, and power theft by consumers. Thus, we think lawmakers should focus on assisting the executive in any capacity to solve the power riddle that has faced the nation since its existence.

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The Federal Government recently signed a deal with Siemens which has committed to invest significant sums across the power value chain. However, while we recognize resolving Nigeria’s power problem is no walk in the park, attempting to ban the alternative energy source for Nigerians in the face of poor power supply appears quite poorly thought out.

We think the bill would struggle to scale through as power brokers prevail on the Senate to quash the bill. Furthermore, we note several political bigwigs are invested in the business of generator importation in Nigeria, thus, we expect pressure from these bigwigs to put the bill to bed.

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6 Comments

6 Comments

  1. Anaga Samson

    March 13, 2020 at 7:48 pm

    We have vote them to power, so there can do anything to us the way them want. By ban generator from this country. Why pollitican, why.

  2. Emmanuel Ukpe

    March 13, 2020 at 11:59 pm

    I thought these Niger State Senators were supposed to help the people and not to be remembered as bunch of idiots.

  3. Olugbenga Ogooluw

    March 14, 2020 at 6:57 am

    NO SACRIFICE NO LIFE, let it be BAN
    How long are we going to remain in this darkness, without ban this, the country will remain in darkness

  4. Mustapha

    March 14, 2020 at 11:33 am

    If thrre is s dignificant improvement in power supply nationwide, impotation of generators will die a natural death, these lwa makers lack foresight!

  5. Anonymous

    March 21, 2020 at 6:10 am

    Glorified bastard…all they do is pass into law irrelevant things and request for…luxurycars….while nigeria who gave dem mandate ..die in hardship…..continue…sharing federal loot with big ghana must go bags…and ban generators as if u dont use dem …jobless idiots glorified in agbada…..mcheeew

  6. Prince

    March 21, 2020 at 8:05 am

    Honestly all the senators from Niger state are useless, anyway this bill maybe passed but won’t work. God punish those ilitrates fucking senators …old fools

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Columnists

More agriculture loans but longstanding bottlenecks remain

Despite the flurry of funds provided via intervention policies, long-standing bottlenecks in the agric sector still exist.

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Nigeria’s agricultural export, Nigeria’s top 10 agricultural exports rose to N206.16 billion in 9-month 

According to local media reports, the Minister for Agriculture, Sabo Nanono through an information official of the Agric ministry announced plans by the ministry to provide relief for farmers in form of interest-free loans, and effective input subsidisation. According to the statement credited to the minister’s representative, the relief is for the recent covid-19 disruptions to farming activities and flooding in Kebbi, Jigawa and Kano states. In addition,
the minister stated the interest-free loans would be provided through a partnership of the Agric ministry and the Central Bank of Nigeria.

We acknowledge that farming activities have been significantly affected in 2020 due to covid-19 movement restrictions during the planting season as well as abnormal rainfall patterns which led to flooding of farmlands. That said, we note that the farmers/herders clashes remain a significant threat to agricultural productivity. These unfortunate events have led to a spike in food prices refelected in the food inflation rate of 16.66% in September according to the National Bureau of Statistics (NBS). Thus, we consider provision of reliefs for farmers important to restore farming activities and output level back to pre-covid levels.

However, we note that the agriculture sector remains plagued with long-standing structural challenges which if ameliorated, would significantly improve output level and drive the country towards its goal of achieving self-sufficiency in food production. Some of the long-standing bottlenecks include; poor transport network to connect farmlands with main markets, poor storage facilities, sub-standard farming inputs, crude agricultural techniques
etc. These in our view, are the reasons why the funds that have been pumped into agriculture via different intervention schemes such as Anchors Borrowers Program (ABP) and Commercial Agricultural Credit Scheme (CACS) have yielded limited results and remain riddled with repayment controversies.

In our opinion, while short term relief for farmers is necessary to immediately alleviate some of the pressures on food prices in the short term, we think some of the flurry of funds provided via intervention policies should be directed at resolving long-standing bottlenecks to truly maximise the full potential of Nigeria’s agriculture promise.

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CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

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Columnists

Inflation rate climbs to 30-month high

Data for September showed that headline inflation in Nigeria rose for the thirteenth consecutive month to a 30-month high.

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Yesterday, the National Bureau of Statistics (NBS) released inflation data for the month of September which showed that headline inflation in Nigeria rose for the thirteenth consecutive month to a 30-month high of 13.71% in September compared with 13.22% in August. On a m/m basis, the headline inflation index increased by 1.48% in, 0.14ppt higher than August’s 1.34%. The pressure on headline inflation in July was broad based as increases
were recorded across both the food sub-index and core sub-index.

In September 2020, the food sub-index was up 16.66% (0.66ppt higher than September’s 16.00%) while it rose by 1.88% on a m/m basis (0.21ppt higher than August’s 1.67%). In our last inflation note, we highlighted how abnormal rainfall patterns, reduced farming activities in the lockdown months and sustained farmers/herdsmen clashes have hampered farm output since the beginning of the harvest season. We believe, the poor harvests which
directly impacts the supply side of the food market negatively amidst a recent scarcity of grains impacted prices negatively in September. Unsurprisingly, the COICOP baskets that recorded the highest increases were oil and fats, fish, potatoes, yams & other tubers, meat, bread & cereals and fruits.

In addition, the core sub-index rose by 10.58% (0.06ppt higher than August’s 10.52%). On a m/m basis, core sub-index rose by 0.94% in September (1.05% in August). According to the inflation report, the biggest increases in the core sub-index basket were recorded in; passenger transport by air, pharmaceutical products, hospital services and passenger transport by road. We think the increase in the pharmaceutical products, hospital & medical services is reflective of covid-19 induced pressures and imported inflation pressures on medical equipments. That said, we highlight that the core sub-index grew at a slower pace despite the impact of higher electricity tariffs and fuel costs in September.

Looking ahead, we expect inflationary pressures to persist. Though we are entering the main harvest months of the farming season, we expect harvests to remain disappointing due to earlier mentioned factors. Thus, we think inflationary pressures will be largely food driven. The Federal Government has agreed to subsidise electricity tariffs for the next 3 months, so we expect this to stem pressures on the core sub-index.

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CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

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Columnists

The “EndSARS” protests and the problem of police reform in Nigeria

The protest is more than a clamour for an end to police brutality, but rather to growing frustration about the state of the economy.

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Youths across the country, mobilized through various social media platforms have taken to the streets in the past few days to protest against the activities of the Special Anti-Robbery Squad (SARS), which has long been accused of unlawful arrests, torture and extrajudicial killings. The Federal Government after a few days of protests was forced to announce that the squad has been disbanded. This, however, did not bring an end to the protests as the
protesters claimed that similar announcements had been made in the past without any effective reform measures.

The protesters demands now appear to have widened to include calls for reforms across the country’s entire police system and they have come up with a 5 point agenda which include; Immediate release of all arrested protesters, Justice for all deceased victims of police brutality and appropriate compensations for their families, setting up of an independent body to oversee the investigation and prosecution of all reported police misconduct within a
period of 10 days, carrying out psychological evaluation and retaining of all disbanded SARS operatives before they can be deployed and an increase police salary and adequate compensation. On Tuesday, the police announced a new unit tagged the Special Weapons and Tactics team (SWAT) which effectively would take over the duties of the defunct SARS. Shortly after this announcement, social media was awash with a new hashtag #EndSWAT.

The Nigeria Police Force (NPF) is the primary law enforcement agency in Nigeria under the leadership of the Inspector General of Police. Prior to 1930, there were regional police forces that were merged to form the NPF. The NPF over time has experienced endemic problems with recruiting, training, inefficiency, and indiscipline leading to widespread corruption which has resulted in a low level of public confidence. Public perception of the Nigerian police are largely negative. There have been several calls and efforts geared towards a reform of the police force over the years but these have not led to any significant improvement in police service delivery. Recently, state governments began to clamour for a devolution of the police force to allow for the establishment of State Police. A Police Reform Bill was proposed as an Act of the National Assembly on 30th May 2018 and was passed by the Senate on 17th April 2019. It was signed into law by the President this year. Insecurity remains one of the biggest challenges facing Nigeria today and the NPF is central to responding to these challenges.

That said, the protests in our view point to more than a clamour for an end to police brutality but rather to a growing frustration among the Nigerian youth about the state of the economy. The protesters who typically are youths below the age of 30 are a part of the Nigerian population that have never seen the system work. From erratic power supply, widespread unemployment, poor healthcare, poor educational system characterised by
incessant strikes, one can understand the growing frustrations in the minds of these young people. In our view, the Nigerian Government needs to see this as a strong signal to not only address the poor state of the economy but to priortise the issues concerning the young people in the country.


CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

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