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Business News

Nigerians spend $14 billion on generators, fuel

It has been revealed that Nigerians spend about $14 billion on generator and fuel yearly in order to prevent their businesses from crippling.

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Ban on generators: Throwing the baby with the bath water, Nigerians spend $14 billion on generators, fuel as Senators seek ban on generator use

With power supply being one of the major business constraints in Nigeria according to the Central Bank of Nigeria (CBN), it has been revealed that Nigerians spend about $14 billion on generator and fuel yearly in order to prevent their businesses from crippling.

For years, generator has served as an alternative source of power for Nigerians, as the country experiences unstable and poor power supply. This has led to increase in generator budget for many households and businesses within the country.

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The amount spent on generator and fuel by Nigerians was revealed by the Director in charge of African Development Bank (AfDB) in Nigeria, Ebrima Faal who stated that it would have negative impact on the power sector.

The $14 billion shows an increase in spending and proves power supply in Nigeria is not getting better despite the privatisation, as Nairametrics reported last year that Nigerians spent about $12 billion fueling generators.

[READ MORE: Ban on generators: Throwing the baby with the bath water?)

In order to improve the power sector, Nigeria privatised the power sector, leading to the creation of 11 distribution companies (Discos), but year in year out, both the government and the Discos have continued to blame each other for the poor power supply.

The increase shows businesses struggle to remain in business, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said in a report by The Nation. He said spending on generator is unavoidable even though it’s increasing cost of operation and affecting contribution to the Gross Domestic Product (GDP) of the country.

“The costs incurred to provide alternative sources of power are inevitable if industrialists are to remain in business in Nigeria. This, perhaps, is the biggest single factor impeding the growth of industrialisation.

“The issue has made our industries very uncompetitive in recent times. That is one of the reasons our industries cannot produce for export unlike their counterparts abroad. Also, our industries contribute less than 10 per cent to the country’s Gross Domestic Product (GDP.)”

According to the International Monetary Fund (IMF), lack of access to electricity and unreliable power supply are key constraints to doing business in Nigeria. The IMF estimated the annual economic loss at about $29 billion.

Senate doesn’t care: Despite the poor power supply, a bill to ban importation of generators into Nigeria passed the first reading in the Senate. The bill was sponsored by Senator Bima Muhammadu Emagi (APC Niger South).

Fueling generators

[READ ALSO: Ban to curtail generator importation faces strict resistance by Senate)

Also, last year, Senator Francis Fadahunsi requested a five-year ban on generator importation. The suggestion was, however, rejected by the Senate President, Ahmed Lawan. The decision to ban generator sets was once successful in 2015 when the Federal Government banned the importation of the most commonly used type of generating set in Nigeria popularly known as “I better pass my neighbour.”

Jaiz bank

It is still puzzling as to why Nigerian Senators keep introducing bills that seek to stop the use of generators in a country with epileptic electricity supply. Even President Muhammadu Buhari’s office was projected to spend N46 million on fueling generators in 2019.

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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    Business News

    Lagos State inaugurates 9-member committee to boost Entertainment & Tourism

    The Lagos State Government inaugurated a Committee Chaired by Veteran actor, Richard Mofe-Damijo, to boost tourism and entertainment in the state.

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    Lagos announces resumption time table for public and private schools, FESTAC town, Lagos cancels 2018 land use charge, LAND USE CHARGE, Lekki sealed buildings, Lagos state governor issues new guidelines for lockdown, consider full reopening of its economy,Sanwo-Olu gifts families of slain police officers N10 million naira each

    The Lagos State Government inaugurated a Committee Chaired by veteran actor, Richard Mofe-Damijo, to boost tourism and entertainment in the state.

    The Committee was inaugurated by Lagos State Governor, Babajide Sanwo-Olu on Wednesday at the Lagos House in Marina, citing that intervention and schemes by the state Committee will boost and fund the sector most affected by the pandemic.

    Veteran Nollywood actor, Richard Mofe-Damijo, is the Chairman of the nine-member committee. Other entertainment sector members of the Committee include Tunde Kelani, Mo Abudu, Kunle Afolayan, Peace Anyim-Osigwe; while government representatives in the Committee are Adebukola Agbaminoja, Ferdinand Tinubu, Taju Olajumoke and Mrs Funke Avoseh.

    What the State Government said

    “The scheme is to support creative ideas of movie and entertainment producers, who are constrained by funds to bring their concepts into reality. Applicants are to be supported with funding based on the financial plans of their projects, the grant may be as much as N40 million for each beneficiary.

    This is a signpost of all pockets of intervention we have created for the development of creativity and the tourism sector. This is with the belief that we can further raise the status of our creative output and commercialise the returns to a level where it can compete with Hollywood and Bollywood.

    We realised most of our film production experts and directors face a lot of funding impediments. We are intervening to close this gap and bring credible veterans who have the knowledge and have demonstrated capacity in the industry to drive this project,” Sanwo-Olu said.

    The Governor added that the State carefully selected five key practitioners in the industry to lead, to be supported by four government officials to limit bureaucracy for the committee to achieve its objectives.

    He said the state wants to create entertainment and tourism business leaders who will use their creativity to enhance the market share of the sector.

    “We want to support industry practitioners to raise capacity, support development of local content and discourage the action of taking proceeds from the industry out of the country, thereby denying local practitioners the benefits of their talents,” the Governor said.

    What you should know

    Recall Nairametrics reported last year that the Lagos State Governor, Babajide Sanwo-Olu, announced the approval of a N1 billion seed capital for investment in the tourism and hospitality sector in the state. The N1 billion seed capital is to help drive new growth in that sector.

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    Financial Services

    PayPal post its strongest Q1, with net profits of $1.10 billion

    PayPal currently has 392 million active accounts with net profit in Q1 rising to $1.10 billion.

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    PayPal acquires shopping browser extension company for $4 billion

    The fintech juggernaut posted impressive growth in its revenues in Q1 bolstered by the growing usage of the digital economy. PayPal stated it had revenues of $6.03 billion in Q1 and earnings per share of $1.22, which outperformed market analysts’ forecast of $1.01.

    Altogether PayPal currently has 392 million active accounts with net profit in Q1 rising to $1.10 billion from $84 million a year earlier.

    The company is riding high taking into consideration that online shopping hit a record high spurred by COVID-19, though some market pundits argue that such could change as the pandemic eased. Still, PayPal’s stellar performance does not look likely to succumb to that prediction anytime soon.

    Highlights of PayPal Q1 earning results

    • Earnings per share: $1.22, adjusted, vs. $1.01 per share expected in a Refinitiv survey of analysts.
    • Revenue: $6.03 billion vs. $5.90 billion expected by Refinitiv.
    • Total payment volume: $285 billion vs. $265 billion expected in a FactSet survey.

    “Our strong first-quarter results demonstrate sustained momentum in our business as the world shifts into the digital economy,” said CEO Dan Schulman in a statement.

    The company’s impressive performance was also reflected in the addition of 14.5 million new active accounts, with 1.5 million new merchant accounts included, bringing the total merchant accounts to 31 million globally.

    “Our record-breaking first quarter results underscore the ongoing strength, diversification, and relevance of our scaled, two-sided, global payments platform. We are raising our FY’21 guidance based on these strong results.” John Rainey the CFO added.

    Consequently, Paypal has upgraded its service offerings with the option of the ability for splitting up purchases and paying them off for a period of time as well as the ability to purchase and sell, Bitcoin, Ethereum, Litecoin, Bitcoin Cash.

    Recent price actions reveal PayPal rose as high as $259.55 in extended New York trading after the announcement was made thereby posting gains of 4.65%.

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