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Discos Failed To Pay N510.53bn In 2020 – NERC

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Power distribution companies in the country failed to pay a total of N510.53bn for the electricity sold to them in 2020 by Nigerian Bulk Electricity Trading Plc, the Nigerian Electricity Regulatory Commission has said.
The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells through vesting contracts to the Discos, which then supply it to the consumers.
The 11 Discos were given a total invoice of N730.71bn for the energy received in 2020 but paid only N220.18bn to NBET, according to NERC data.
The power distributors received a total invoice of N52.13bn in January; N52.01bn in February; N52.62bn in March; N68.08bn in April; N68.09bn in May; and N56.27bn in June.
The Discos received a total invoice of N66.33bn in July; N63.62bn in August; N59.10bn in September; N62.95bn in October; N62bn in November; and N67.50bn in December.
But they paid N14.96bn in January; N13.18bn in February; N6.07bn in March; N10.67bn in April; N12.84bn in May; and N12.91bn in June.
They paid N12.91bn in June; N12.91bn in July; N14.99bn in August; N37.57bn in September; N22.47bn in October; N33.27bn in November, and N28.33bn in December.
NERC, in its latest quarterly report, noted that the financial viability of the Nigerian electricity supply industry had remained a major challenge threatening sustainability.
“The liquidity challenge is partly due to the non-implementation of cost-reflective tariffs, high technical and commercial losses exacerbated by energy theft and consumers’ apathy to payments under the widely prevailing practice of estimated billing,” it said.
It said the period of the lockdown introduced by the Federal Government as a measure to curtail the spread of COVID-19 pandemic in 2020 further affected Discos’ billing of post-paid customers.
“The severity of the liquidity challenge in NESI was reflected in the settlement rates of the service charges and energy invoices issued by Market Operator and NBET respectively to each of the Discos as well as the non- and low payment by the special and international customers respectively for the services rendered by the MO,” the regulator said.
According to the report, the Discos were expected to make a market remittance of 44.87 per cent during the second quarter of 2020 but only 28.05 per cent settlement rate was achieved within the timeframe provided for market settlement in the Market Rules.
The PUNCH reported on Monday that electricity consumers paid a total of N542.73bn to the Discos last year, out of a total bill of N816.15bn.

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Minister Affirms Nigeria Air Will Take Off April 2022

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Nigeria’s national carrier, Nigeria Air, will take off by April 2022, Hadi Sirika, minister of aviation, said on Wednesday.

The minister announced the take-off date while briefing state house correspondents after the federal executive council (FEC) meeting at the presidential villa, Abuja.

He said the national carrier will be run by a company in which the Nigerian government will hold a five percent stake while Nigerian entrepreneurs will hold 46 percent.

He said the remaining 49 percent will be reserved for yet to be assigned strategic equity partners, including foreign investors.

Sirika said the national carrier, when operational, will create about 70,000 jobs for Nigerians.

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Nigeria Needs $1.5trn To Bridge Infrastructure Gap, Says Buhari

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President Muhammadu Buhari says Nigeria needs $1.5 trillion within a 10-year period to achieve an appreciable level of infrastructural development.

According to a statement by Garba Shehu, presidential spokesperson, Buhari said this on Tuesday at the COP26 side event on improving global infrastructure.

COP26 is currently holding in Glasgow, Scotland.

The president said his administration has taken infrastructure expansion in Nigeria seriously, while being conscious of the fact that new investments in critical sectors of the economy would aid lifting 100 million Nigerians out of poverty by 2030.

“There is a nexus between infrastructural development and the overall economic development of a nation,” Buhari said.

“My administration identified this early enough as a major enabler of sustainable economic development and the realisation of other continental and global development aspirations, particularly the 2030 Agenda for Sustainable Development Goals.

“On my assumption of office in 2015, Nigeria faced a huge infrastructure deficit and the total National Infrastructure Stock was estimated at 35% of our Gross Domestic Product.

“In solving these problems, we embarked on a massive infrastructure expansion programme in the areas of Health care, Education, Transportation, Manufacturing, Energy, Housing, Agriculture, and Water Resources.

“We provided more financial resources for these policies, charted new international partnerships and pursued liberalisation policies to allow private sector participation.

“We introduced the revised National Integrated Infrastructure Master Plan – a policy document that ensures our infrastructure expansion projects is cross-sectorally integrated and environmentally friendly.”

The president welcomed the plan of the G7 countries to mobilise hundreds of billions of dollars of infrastructure investment for low- and middle-income countries.

He noted that the ‘Build Back Better World’ plan, an initiative of the G7 countries, is expected to be a value-driven, high-standard, and transparent infrastructure partnership.

Buhari also told the world leaders that Nigeria is open to investment in infrastructural development.

‘‘Nigeria is ready for your investments in infrastructural development in the country,” he said.

‘‘My administration has established a clear legal and regulatory framework for private financing of infrastructure to establish a standard process, especially on the monitoring and evaluation process.

‘‘We look forward to working with you in this regard.”

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PenCom Moves To Diversify Pension Funds Portfolios, Reduce FG’s Pension Liabilities

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By Sola Alabadan

The National Pension Commission (PenCom) has promised to focus efforts on facilitating increased diversification of Pension Fund portfolios, as well as aggressively pursue efforts aimed at reducing pension liabilities of the Federal Government.
PenCom’s Director General, Mrs. Aisha Dahir Umar, stated this in her report contained in the 2020 annual report of the commission made available today.
She also assured that the commission would seek to expand coverage of the Contributory Pension Scheme in States, Local Governments and the informal sector; while also enhancing public awareness campaign efforts, and striving to improve service delivery in the industry.
Going forward, the PenCom boss pointed out that the commission would re-evaluate the milestones of the past years and consolidate its efforts to build a future-ready and resilient work environment underpinned by various initiatives.
She emphasised that PenCom’s focus shall be on a five-prong strategic approach that steadily pursues and addresses identified gaps while creating a more agile organisation with a culture that supports innovation and continuous improvement.
Meanwhile, the annual report indicated that the Pension Fund Administrators (PFAs) generated total earnings of N109.68billion in 2020, representing an increase of 3% when compared with the N106.70billion recorded in 2019.
The combined operating expenses incurred by the PFAs amounted to N55.20billion, while profits before taxes amounted to N54.48billion.
The major source of income for the PFAs was fund management fees, which accounted for over 80% of total Income.
The PFAs recorded a combined Return on Assets of 30.07% and a combined Return on Equity of 35.19%. This indicated that the PFAs sustained their profitability in the year under review.
The six CPFAs generated a total revenue (income and transfers from Sponsors) of N2.68billion, which was a 7.58% decrease compared to the N2.90bllion generated in 2019.
The major source of revenue for the CPFAs were inflows from their sponsor companies, which constituted 55% of their total revenue, while management fees and investment income accounted for 41% and 4%, respectively.
The CPFAs incurred a total expenditure of N2.74billion and a combined profit of N52.38million in 2020. Operating expenses comprised mainly of staff costs, which accounted for over 69% of operating expenses.
The PFCs generated a combined income of N24.09billion, representing a 2.75% decrease when compared with the N24.77billion generated in 2019.
The major source of income for the PFCs was custodial fees, which constituted 80% of their total income, while investment income and other income accounted for about 20% of PFCs total income.
The PFCs incurred total operating expenses of N7.73billion and a combined profit of N16.36billion in 2020. This indicated a 12.61% decline in the PFCs’ profitability when compared to the N18.72 billion recorded in 2019.

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