Sanwo-Olu to Fed Govt: don’t reduce Lagos-Badagry Road standard

News on Sanwo-olu

Lagos State Governor Babajide Sanwo-Olu yesterday appealed to the Federal Government to ensure that the ongoing rehabilitation of Lagos-Badagry Expressway meets international standard.

Sanwo-Olu spoke when he hosted members of the Senate Committee on Works, who visited him at the State House, Alausa Ikeja.

They were led by Chairman of the committee, Senator Adamu Aliero.

The governor, who explained that the state government was working on a 10-lane road from Lagos State University (LASU) to Okokomaiko corridor, believed that the Ministry of Works should also replicate same from Agbara to Seme border.

He said since the road is an international gateway, constructing two lanes will not meet the standard required.

The governor said: “First is to thank Mr. President for giving the support at the budgetary level through the Ministry of Works. More importantly to thank the committee for the oversight function to Lagos.”

He said that since Lagos used to be the former capital, “it has inherited both Federal Government assets and liabilities. We have to manage the assets, which is a huge responsibility.”

One billion barrels of crude oil discovered, says Sylva

Sylva not imposing any candidate, says APC chieftain

Minister of State for Petroleum Resources, Chief Timipre Slyva, said on Wednesay that about one billion Barrels of Crude oil have been discovered in the Northeast.

Sylva spoke at a news conference to end the 2020 Nigeria International Petroleum Summit (NIPS), in Abuja.

“The figure we are getting, the jury is not totally out yet, but from the evaluation results we are getting, the reserve that has been discovered in the northeast is about a billion barrels.

“Those are the kind of figures we are seeing and we are beginning to understand the geological structure of the region,” he said.

According to him, a lot of oil is yet to be found in the country.

He added that there was need for more exploration in the country as more oil would be discovered.

Commenting on passing of the Petroleum Industry Bill (PIB) by June, he said he was confident that it would be passed based on cordial relationship between the legislature and the executive.

“We are banking on the fact today, to make that promise on the fact that there is a very cordial relationship now between the legislature and executive.

”Today, Nigerians all agree that there is a need for us to pass the PIB.

”For so long we have been quivering about the PIB, for more than 20 years. And for so long, we have not been able to attract a lot of investment into the oil sector.

”Let me give you an example. By 2002, our oil reserves stood at around 22 billion barrels. We were able to grow that reserve from 22 billion barrels to 37 billion barrels by 2007.

”From 2007 to now, we have only been able to grow our reserves from 37 billion barrels to 37.5 billion barrels, in more than 10 years. Why? Not much investment is coming into Nigeria,” he added.

He noted that investors could not invest in Nigeria if the fiscal framework was shaking or uncertain.

“If nobody knows when laws will be passed, nobody will want to invest new capital in Nigeria. And that is why you see that we have almost been stagnant in the Nigerian oil industry.

So, we believe today that there is a consensus among all of us – industry, Nigerians and government – that there is a need to stabilise the fiscal framework so that investors will be certain and move their money to Nigeria.

”There are very great opportunities in Nigeria, and I believe if we can only stabilise the fiscal framework and bring peace to Nigeria, investments will flow into Nigeria.

“That is really what gives me the confidence to say that there is a consensus now among all patriotic Nigerians that in six months the PIB will be passed,” he added.

On revamping of the refinery, he said that rehabilitation of Port Harcourt refinery would start in the first quarter of 2020.

We are going to start the rehabilitation of the port Harcourt refinery which is the biggest refinery in Nigeria, if we are able to finish the port Harcourt refinery we would have achieved a lot as a government. “

“Meanwhile we are also continuing with studies around Warri refinery, we are also continuing discussions around Kaduna refineries,” he said.

Mele Kyari Harps on Energy Security in Africa

Mele Kyari

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has called on African countries, particular leaders and oil and gas players in the continent, to focus on providing structures that would ensure energy security for their citizens.

He, made the call in Abuja, while presenting his keynote address to set the tone for a panel discussion at the third edition of the Nigerian International Petroleum Summit (NIPS) that ended wednesday.

Kyari, who spoke on the topic: “Oil and Gas: Future Scenarios and Implications for Security, Environment and Economic Growth,” noted that the corporation has a framework in place towards ensuring energy security in Nigeria.

“African countries must focus on building structures that ensures energy security for the citizens. NNPC is committed to that and has a framework to make sure that the needed energy is available for the needs of the country,” he stated.

The GMD, who acknowledged the global clamour for energy transition from fossil fuels to renewable sources, however noted that hydrocarbons would continue to form the larger part of the energy mix in the foreseeable future.

“Several researches continue to confirm that by 2040, renewables will be contributing about 20 percent of the global energy mix. This implies that fossil fuels will still contribute at least 70 percent,” he argued.

He, therefore, urged African countries, who are still mostly underdeveloped, to continue to utilise the hydrocarbon resources available to them to develop energy sources for their populace.

According to him, “the focus must be in making sure that the energy is clean. We have to use what we have. Today, oil is being found in unexpected places.

“This contributes to the growth of middle class consumers. And so demand of fuel will continue with increase with population and prosperity. Global demands will remain over 100 million barrels per day.”

Kyari, added that African countries should focus not solely on the clamour for renewables but largely on the need to deliver energy for the development of their people.

BPE Opposes Clamour to Reacquire Privatised Power Assets

Image result for Bureau of Public Enterprises (BPE)The Bureau of Public Enterprises (BPE) wednesday warned against the ongoing clamour for the federal government to re-nationalise already privatised power assets of generating companies (Gencos) and distribution companies (Discos).

BPE’s Director General, Mr. Alex Okoh, at an interactive session with journalists in Abuja, advised the government not to succumb to the pressure of re-possessing the privatised assets.

The federal government has been under pressure to revoke the ownership of the assets of the Discos from the investors and pay them off with N736 billion.

President of the Senate, Senator Lawan Ahmed, had also recently called for a review of the sale of the assets just as the National Economic Council (NEC) constituted an ad-hoc committee, headed by the Governor of Kaduna State, Mallam Nasir el-Rufai, to review the ownership of power discos.

According to Okoh, re-nationalising the power assets is not the solution but evolving a better investment option around the distribution value chain would pay the country better.

He said the matter had become a topical and emotive issue, adding that people have forgotten that the electricity sector was almost dead before the 2013 privatisation.

Okoh said : “I think the Discos have become a topical and very emotive issue. We forgot that the electricity sector was almost dead before it was privatised. Generation was at about 1,300 Megawatts (MW) before privatisation. We know what the state of the electric power industry was under the management of NEPA and PHCN.

“We must be extremely careful about these key national utilities. For a country that prides itself to be the biggest economy on the continent of Africa, electricity per capita is 150 kilowatts per hour (kw/h) for every Nigerian. The second biggest economy in Africa, South Africa, the electricity per capita is 4,437 kilowatts per hour. So that shows you what we are dealing with here. Until we resolve it, then we are not going to get anywhere in terms of economic growth in this country. 150kw/h electricity is totally a non-starter as far as I am concerned. So, I think we should be more concerted in our efforts to solve the power problem.

“The problem, as far as I am concerned is not about the privatisation of the discos, but looking at the entire value chain. But what I will not advocate as an individual is a re-nationalisation of the power sector

“If it is necessary to improve the distribution infrastructure, then let us determine what that investment is and look at the best way to provide investment for the distribution power chain and not to re-nationalise the power assets. I think it will be a fundamental error to go in that direction.”

He added that the Presidential Power Initiative, which is referred to as the Siemens ‘ Project, provided a credible way to address the challenges in infrastructure, transmission and distribution.

He also expressed optimism that by next year, end-to-end availability of power would hit seven gigawatts.
Okoh identified part of the problems in the power sector as excess capacity in generation with low capacity in terms of distribution while transmission is a serious constraint.

He noted that about 13.5 Gigawatts of electricity are currently being stored in the power pool but not more than five megawatts can be transmitted.

According to him, anytime an attempt is made to transmit over five megawatts, system collapse occurred.

Giving an insight into the activities of the privatisation agency this year, he said one of its priorities was to privatise or commercialise 20 government-owned enterprises, with proceeds expected to hit over N270 billion.

However, N3.9 billion is projected as cost of transactions, leaving a total of N268.3 billion, which would be remitted into the Consolidated Revenue Fund (CRF) as part of revenue to fund the 2020 federal budget.

A breakdown of the enterprises billed for privatisation and commercialisation shows that the energy sector, with a total of nine assets, has the bulk with five from development and natural resources.

NIPOST, which is one of the three titles slated for commercialization, is under the industries and communication sector.
Explaining the delay in the sale of the Bank of Agriculture (BoA), Okoh attributed it to ‘complexity’, noting that over the years, it had been poorly-managed.

He put its shareholders’ fund in the negating region of N15 billion, adding that in that state, it is difficult to sell.
He stated that the BPE was opening channels of discussions with the Central Bank of Nigeria (CBN) to write off part of NIPOST’s non-performing loans.

According to him, a minimum of N15 billion is needed to recapitalise BoA.
Okoh explained that his agency is desirous of helping the federal government overcome the fiscal challenges arising from revenue shortfalls.

He said: “We need to go outside the traditional source of revenue – oil. We have started looking at more creative IGR sources, including the latent and residual assets of government and how we can convert these assets into some form of liquidity to fund the budget. We also hope through our activities for the year to reduce the federal budget deficit. We are aware that about N2 trillion was budgeted for deficit and this will be financed through borrowing. The cost of servicing these debts is very high. So, we need to move away from those sources of funding the budget and begin to look at assets that are redundant and how to convert those assets to cash.

“We want to reduce government subvention to some of the entities that we are planning to privatise or commercialise in one way or the other in the course of the year. We are not only interested in privatising these assets and get the proceeds, we are also looking at reducing the subvention and the budgetary allocations that otherwise would have been provided for these enterprises.”

Demutualisation will Activate Idle Capital  –  Kurfi

As the demutualisation  process of the Nigerian Stock Exchange (NSE) nears completion, the Managing Director, APT Securities and Funds Limited, Mallam Garba Kurfi, said that the exercise would boost economic activities and activate idle capital in the market.
The NSE had announced that it would convene a mandatory Court Ordered Meeting (COM) of its members to pass requisite resolutions for the demutualisation of the Exchange on March 3.
 Speaking at the Capital Market Correspondents Association of Nigeria (CAMCAN) first quarter forum in Lagos yesterday, Kurfi noted that demutualisation would reactivate idle capital in the market, thereby boosting economic activities.
He added that demutualisation would change the perspective and drive more growth for the nation’s economy.
“It is a good thing and all of us are going to be happy at the end of the day because it is going to unlock more capital for the market.
“For instance if I place shares as collateral, I can trade and make money, we are pleased this is coming after so much delay, this will change the economy’s perspective as well.
“My only worry is that we are slow starter, and we need our regulators to wake up to their responsibilities.
“The issue of demutualidation started many years ago but we are still talking about it in 2020.
“It is already a history in Nairobi- Kenya, however, it is better late than never.
CIf NNPC  and LNG eventually get listed on the Exchange, it will make more dead capital alive”, Kurfi said.
While offering insights to performance of the market in 2019, Kurfi explained that the performance of the market on quarterly basis, was the worst in the last 10 years with negative returns in all the quarters.
He, however, attributed the performance to the tensed polity in the build up to the 2019 election that dampened investors’ confidence.
On market outlook, Kurfi stated that the market was expected to close in double digits by the end of the year 2020.
“The All Share Index is likely going to close for the year 2020 in positive and may close in double digits.
“Both technical analysis and fundamental analysis move to the positive direction.
“However the market may experience volatility because of the changes in the reporting financial reports as adopted by the exchange without adequate awareness of the brokers.
“Also, I foresee banks unlikely to make profits like they did in 2019 because they are pressured by the Central Bank of Nigeria (CBN) directive to meet up 65 per cent loan to deposit ratio (LDR)”, Kurfi added.
According to him, the review of  Cash Reverse Ratio (CRR) from 22.50 per cent to 27.50 per cent would redirect funds into the stock market.
Kurfi noted that the restriction placed by apex bank  in Open Market Operation and Treasury Bills participation if sustained would impact positively on the stock market.
According to him, the Export & Import window of foreign exchange policy should be retained to ensure stability of foreign.
He said that the market may experience volatility because of the changes in the reporting financial reports as adopted by the Exchange without adequate awareness of the brokers.
On sectors to watch in 2020, Kurfi explained that companies that would benefit from VAT exemption like Nestle would likely declare better profit.
He added that building material companies were likely to double their turnover such as cement companies due to early implementation of the budget.
Kurfi said that insurance companies were likely to do better because of the recapitalisation with some engaging in merges and acquisitions or takeover.