Economy
Ambode Woos Investors with 24-Hour Electricity by 2018
By Dipo Olowookere
Governor Akinwunmi Ambode of Lagos State has assured investors and residents of the state that his administration will ensure 24-hour power supply by the end of 2018.
“As a government, we are strongly committed to power freedom; we want to free ourselves from darkness and we want to open up the sector for more investors,” Mr Ambode said this at an interactive session with members of the business community and informal sector last week.
The Governor expressed readiness of the state government to partner with any investor willing to key into his administration’s massive infrastructural renewal drive in critical sectors, saying such would be a win-win situation for the overall benefit of the people.
Mr Ambode said public private partnership was critical to accelerate development, and that the government is open to collaborate with interested investors.
For instance, Governor Ambode said the state government would be willing to partner with any investor interested in taking up the second phase of the Mile 2 to Seme Border ten-lane road project.
“At the moment, work is already ongoing from Eric More to Okokomaiko but we are willing to partner with any investor interested in taking up the construction of the second phase which is ten-lane road from Okokomaiko to Seme Border.
“If we are able to achieve that, it will open up and transform the western axis, especially Badagry forever, and the project will also complement the massive projects being undertaken in the axis,” the Governor said at the gathering.
Besides, Governor Ambode said plans were already at advanced stages to bring about constant power supply to all homes and businesses in the State by the end of 2018.
He said though the political geography of the country was affecting the visionary strategy to solve the power challenges being essentially in the control of the Federal Government, but the State Government had devised policies and strategies to short-circuit power generation, transmission and distribution to ensure constant power supply to the people of the State.
Likewise, the Governor said the state government is also in talks with electricity distribution companies operating in the State to see possibility of supplying 24/7 power to residents at a bit higher tariff than what currently obtains subject to agreement of all stakeholders, while government would be the guarantor of the people.
The Governor also revealed that the legal framework to prevent power theft and also legitimize the concept of power generation had already been sent to the State House of Assembly for approval.
“Presently, we have less than 1,000MW in Lagos and the fundamental issues remain with generation, transmission and then distribution. Who is transmitting? It is still owned primary by the Federal Government but in Lagos State, we have become creative and we have done Independent Power Project (IPP) before through which we were able to generate 47.5MW which was distributed short-circuiting transmission.
“So, if it works, does it look like a template we can now use to get power freedom or what we call power security? If we say we are the fifth largest economy in Africa and we are not in control of how power is generated in an economy that wants to move from fifth to third, then something is wrong. So, what we are saying is let’s find a way to short-circuit them within the ambit of the law.
“If the law allows you to have independent power and going through the regulatory commission then you are smart enough to do that. The only thing we have done is to get permission from the Nigerian Electricity Regulatory Commission (NERC) to create clusters of embedded power in our state and if we are able to do it, we become a test case for the rest of the economy,” he added.
On the collaboration with electricity distribution companies, Governor Ambode said the state government was willing to stand as the guarantor for the people to get 24/7 power supply.
“The idea is that look can we have a mid-point on how to get 24/7 power? The generator that people are using is extremely expensive and what we are saying is that can we work with all these stakeholders and push the tariff for example from N20 to maybe N40 but guarantee the people of 24/7 power? So, if I am able to do that and I get the confidence, I will just stand on behalf of Lagosians to say that the new tariff as agreed by all of us, if we can provide it for the people 24/7, they are likely to pay. In case they don’t pay, I get financially exposed.
“That is what we are trying to do; we become the guarantor on behalf of Lagosians and then if all those things work out, by this time next year, people will have constant power supply,” the Governor disclosed.
By Adedapo Adesanya
The Naira opened the new trading week on a negative note on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEX) and the black market.
At the parallel market, the Nigerian currency weakened against the US Dollar by N5 to sell for N1,380/$1 compared with the preceding session’s rate of N1,375/$1, and at the GTBank FX desk, it shed N1 to trade at N1,373/$1 versus N1,372/$1.
At the official market, it lost 63 Kobo or 0.05 per cent against the Dollar during the session to close at N1,362.84/$1, in contrast to last Friday’s value of N1,362.21/$1.
However, the Nigerian Naira gained N2.30 against the Pound Sterling at the spot market yesterday, quoting at N1,821.29/£1 compared with the previous rate of N1,823.59/£1, and improved against the Euro by 23 Kobo to settle at N1,574.35/€1 versus N1,574.58/€1.
Data from the Central Bank of Nigeria (CBN) showed that interbank forex turnover increased to $92.248 million across 90 deals, from $73.565 million last Friday.
On the policy front, participants believed that the application of the fourth edition of the Foreign Exchange Manual of the central bank, which introduces updated guidelines for foreign exchange transactions and tightening compliance requirements for authorised dealers and market participants, will enhance market flexibility and ease previous restrictions.
Meanwhile, the cryptocurrency market snapped from recent declines, jolted by Strategy’s purchase of 1,550 Bitcoin for approximately $101 million, increasing its total holdings to 845,256 BTC. The company raised $181 million through common stock sales, using the proceeds to fund the bitcoin purchase and increase its cash reserves to $1 billion, pushing the price of the coin higher by 3.2 per cent to $63,731.69.
Cardano (ADA) appreciated by 8.4 per cent to $0.1738, Ethereum (ETH) rose by 5.2 per cent to $1,711.54, Solana (SOL) expanded by 5.1 per cent to $67.82, and Ripple (XRP) improved by 4.9 per cent to $1.18.
Further, Dogecoin (DOGE) jumped by 4.3 per cent to $0.0873, Binance Coin (BNB) soared by 2.7 per cent to $609.50, and TRON (TRX) increased by 0.7 per cent to $0.3274, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $0.9997 and $0.9998, respectively.
By Aduragbemi Omiyale
The federal government has been advised to consider exploring other funding sources to finance its budget deficits.
Speaking with Punch recently, the chief executive of CSA Advisory, Mr Aliyu Ilias, said the current appetite for borrowing by the government cannot be sustained because it elevates debt-servicing costs.
The economist suggested the sale of some public assets and the involvement of the private sector in infrastructure financing for economic growth.
According to him, running to the debt markets to raise funds for the government is not the best route to take, as the reliance on borrowing always leads to higher debt-servicing obligations.
“The more you borrow, the more you are also incurring more debt services,” he said, tasking the government to also capitalise on increased oil revenues stemming from ongoing geopolitical tensions in the Middle East.
“The government can actually sell off some of their assets to raise more money. The government can also, if you look at the revenue we are getting from oil, it’s getting more, especially with this war. It’s another opportunity for us to actually not borrow again,” Mr Ilias submitted.
He also pointed to ongoing tax reforms as another avenue to improve government finances and narrow the fiscal gap.
“The government can also look at tax reform. The fact is that the government does not have money. The only chance for getting more money is to address the financial deficit,” he added.
By Adedapo Adesanya
Crude oil was up by $1 on Monday as Iran and Israel said they had halted attacks on each other following an appeal from US President Donald Trump.
Brent crude futures gained $1.16 or 1.3 per cent to trade at $94.25 a barrel, while the US West Texas Intermediate (WTI) crude futures were up 76 cents or 0.8 per cent to $91.30 per barrel.
Iran’s military said Monday it halted attacks on Israel after the two countries exchanged their most intense strikes in months, further straining an already shaky ceasefire as well as the US-Israeli relationship. Iran, however, said it would resume strikes if Israel continued to hit Hezbollah in Lebanon.
Israel also halted attacks on Iran, Israeli Prime Minister Benjamin Netanyahu said, stopping short of acknowledging a ceasefire that US President Donald Trump said the countries were aiming for.
President Trump said earlier that the US blockade, which was introduced in April, would remain in place “in full force” until a final peace agreement between the two warring nations is reached.
Prices gained more than 5 per cent earlier on Monday after renewed Israeli strikes on Iran and attacks on Lebanon had reduced hopes of an imminent end to the wider war.
Market analysts noted that because of the strikes, investors were concerned that flows through the Strait of Hormuz might remain restricted for longer. Roughly a fifth of the world’s daily supply of oil and liquefied natural gas passed through the waterway before US-Israeli airstrikes at the end of February unleashed the latest escalation of the Middle Eastern conflict.
Yemen’s Iran-aligned Houthis said on Monday they would ban ships linked to Israel from the Red Sea after Israel renewed its military attacks on Iran, adding to concerns about global shipping and energy flows.
In the face of the supply crisis, a sub-group under the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday agreed on its fourth oil output target increase in four months. The seven members decided to increase targets by 188,000 barrels per day from July, the same as the June hike, which was adjusted down from monthly increases of 206,000 barrels per day in May and April to take into account the exit of the United Arab Emirates (UAE).
On paper, the sub-group has increased its output quotas from April to June by almost 600,000 barrels per day, but in reality, the group’s production has collapsed due to export cuts by Gulf members, averaging 33.19 million barrels per day in April compared with 42.77 million barrels per day in February.
Saudi Arabia has cut its official selling prices for crude oil to Asia in July for a second month.
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