Economy
BPE Justifies N213b Intervention Fund
By Dipo Olowookere
The Bureau of Public Enterprises (BPE) put the accumulated shortfall due to wrongly assumed Aggregate Technical, Commercial and Collection (ATC &C) of 25 per cent from November 1, 2013 to December 31, 2014 at N213 billion.
According to BPE, the Central Bank of Nigeria (CBN’s) N213 billion intervention fund was made available to enable Nigerian Electricity Regulatory Commission (NERC) spread the recovery of the money from the consumers over a ten year period.
Acting Director-General of BPE, Dr Vincent Onome Akpotaire, who made this disclosure in a statement, explaining why the CBN gave a loan of N213 billion to the privatized power companies, said that the “Multi-Year Tariff Order 2 (2012) that was put in place when investors took over on November 1, 2013, had assumed AT & C loss level of 25 per cent.
He stated that the agreements signed with the investors gave Nigeria Electricity and Regulatory Commission and the Distribution Companies (DISCOs) one year to determine the true AT & C loss levels, which was subsequently found to be about 50 per cent on the average.
Expatiating on why the core investors in DISCOs were not investing heavily in line with the agreements they signed with the government, he said the transaction structure compelled investors to raise money and pay for their 60 per cent equity in DISCOs using their own balance sheet and that upon take over, the investors were expected to leverage on the acquired companies’ clean balance sheets to raise additional funds for investments.
However, he pointed out that financial institutions have refused to lend money to the DISCOs until a cost reflective tariff is approved in line with the agreements; and the CBN loan to the industry removed from the books of the DISCOs.
Akpotaire suggested that for the power privatization in Nigeria to work, the industry’s regulator- NERC must be allowed to perform its mandate without interference.
He said that NERC must be allowed to fix tariffs in line with the Electric Power Sector Reform Act (EPSRA) without interference from any quarters and that if the tariffs are considered high the government could decide to mitigate the effects by taking up a percentage of the tariffs instead of outright cancellation.
The Acting Director-General cautioned against the blame-game in the power sector and appealed to the Executive and the Legislative arms of the government as well as other stakeholders to come together to find solutions to the sector’s challenges.
Explaining why the Federal Government is being asked to subsidise the Nigeria Electric Supply Industry (NESI), the BPE’s helmsman said the loss levels at the point of privatistion of 50 per cent could not be fully passed to consumers immediately to avoid rate shock and consumer rebellion.
Akpotaire said, “although the Federal Government owns 40 per cent of the DISCOs, it was not part of the management because it was not funding its shares on the Boards. The Performance Agreement executed with investors has assigned operational risks to investors. The PA provides that a core investor who fails to achieve agreed targets stands the risk of losing his/her equity at the payment of $1 by the Federal Government.”
On why the BPE is on the Boards of the power companies, the Acting Director-General explained that “since 1988 when TCPC, the agency BPE replaced, was established, BPE has always represented the Federal Government on the board of any company undergoing reform and privatisation.” This makes it possible for the BPE to have access to all the information it require to carry out its statutory duties of reform and privatization, “Since all key strategic decisions are made by the board, it would not make sense for BPE to give guarantees on behalf of a company it does not know the critical decisions that its boards had taken.” Besides, he added, “The initial five-year period is usually a time to help nurture the companies on the path of growth and success.”
Guardian
By Adedapo Adesanya
President Bola Tinubu on Friday presented a budget proposal of N58.47 trillion for the 2026 fiscal year titled Budget of Consolidation, Renewed Resilience and Shared Prosperity to a joint session of the National Assembly, with capital recurrent (non‑debt) expenditure standing at 15.25 trillion, and the capital expenditure at N26.08 trillion, while the crude oil benchmark was pegged at $64.85 per barrel.
Business Post reports that the Brent crude grade currently trades around $60 per barrel. It is also expected to trade at that level or lower next year over worries about oil glut.
At the budget presentation today, Mr Tinubu said the expected total revenue for the year is N34.33 trillion, and the proposal is anchored on a crude oil production of 1.84 million barrels per day, and an exchange rate of N1,400 to the US Dollar.
In terms of sectoral allocation, defence and security took the lion’s share with N5.41 trillion, followed by infrastructure at N3.56 trillion, education received N3.52 trillion, while health received N2.48 trillion.
Addressing the lawmakers, the President described the budget proposal as not “just accounting lines”.
“They are a statement of national priorities,” the president told the gathering. “We remain firmly committed to fiscal sustainability, debt transparency, and value‑for‑money spending.”
The presentation came at a time of heightened insecurity in parts of the country, with mass abductions and other crimes making headlines.
Outlining his government’s plan to address the challenge, President Tinubu reminded the gathering that security “remains the foundation of development”.
He said some of the measures in place to tame insecurity include the modernisation of the Armed Forces, intelligence‑driven policing and joint operations, border security, and technology‑enabled surveillance and community‑based peacebuilding and conflict prevention.
“We will invest in security with clear accountability for outcomes—because security spending must deliver security results,” the president said.
“To secure our country, our priority will remain on increasing the fighting capability of our armed forces and other security agencies by boosting personnel and procuring cutting-edge platforms and other hardware,” he added.
By Aduragbemi Omiyale
The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.
This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.
Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.
“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.
She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”
The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.
“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.
PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.
The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.
The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.
By Adedapo Adesanya
Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.
According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.
At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.
Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.
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