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
The duo of MRS Oil and FrieslandCampina Wamco Nigeria Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Friday, June 5.
MRS Plc lost N19.00 during the session to sell at N171.00 per share compared with Thursday’s value of N190.00 per share, and FrieslandCampina Wamco Nigeria Plc depreciated by N8.70 to finish at N181.68 per unit compared with the preceding session’s N190.38 per unit.
As a result, the market capitalisation further lost N22.59 billion to close at N2.607 trillion versus the N2.630 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) dropped 37.76 points to settle at 4,358.32 points, in contrast to the previous day’s 4,396.08 points.
The alternative stock market closed the last trading day of this week with a price gainer, Central Securities Clearing System (CSCS) Plc, which gained 6 Kobo to quote at N78.40 per share compared with the preceding session’s N78.34 per share. However, it could not prevent the market from going down at the close of business.
Yesterday, the volume of securities bought and sold by investors went down by 50.0 per cent to 140,345 units from the preceding day’s 280,714 units, the value of stocks decreased by 16.5 per cent to N17.9 million from the previous session’s N21.5 million, and the number of deals carried out by market participants fell by 35.7 per cent to 27 deals from the 42 deals recorded on Thursday.
When trading activities closed for the day, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 64.7 million units traded for N4.4 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
By Dipo Olowookere
Renewed interest in financial stocks and others lifted the Nigerian Exchange (NGX) Limited by 0.15 per cent on Friday.
Customs Street closed higher yesterday despite the 1.37 per cent loss recorded by the consumer goods sector as a result of profit-taking.
This was offset by gains in the other key sectors of the local bourse, as the insurance counter chalked up 1,14 per cent. The banking space appreciated by 0.90 per cent, the industrial goods segment grew by 0.46 per cent, and the energy sector expanded by 0.01 per cent.
Consequently, the All-Share Index (ASI) went up by 366.00 points to 242,593.31 points from 242,227.31 points, and the market capitalisation gained N235 billion to close at N155.594 trillion compared with the previous day’s N155.359 trillion.
The trio of International Energy Insurance, Abbey Mortgage Bank, and DAAR Communications improved by 10.00 per cent each yesterday to N7.26, N9.35, and N1.98, respectively, while Zichis advanced by 9.39 per cent to N32.38, with Sovereign Trust Insurance up by 8.70 per cent to N2.50.
On the flip side, Academy Press lost 9.84 per cent to quote at N8.25, University Press depreciated by 9.73 per cent to N5.10, Africa Prudential dipped by 2.63 per cent to N12.95, Chams crumbled by 2.44 per cent to N4.00, and International Breweries slipped by 1.59 per cent to N12.35.
Business Post reports that the market breadth index was positive during the session after recording 37 appreciating equities and 14 depreciating equities, implying strong investor sentiment.
Abbey Mortgage Bank led the activity chart with a turnover of 164.1 million units worth N1.5 billion, Ellah Lakes sold 76.7 million units for N767.2 million, Access Holdings transacted 44.8 million units valued at N1.1 billion, Linkage Assurance exchanged 23.0 million units worth N41.2 million, and The Initiates traded 20.2 million units for N562.1 million.
At the close of trades, market participants transacted 608.5 million units worth N32.0 billion in 53,826 deals versus the 588.5 million units valued at N27.9 billion executed in 57,352 deals in the previous session. This showed that the number of deals eased by 6.15 per cent, the volume of transactions rose by 3.40 per cent, and the value of transactions soared by 14.70 per cent.
By Adedapo Adesanya
The Naira further depreciated against the United States Dollar by N3.46 or 0.25 per cent to N1,362.21/$1 from N1,358.75/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 5.
However, it appreciated against the Pound Sterling in the same market window during the session by N4.47 to trade at N1,823.59/£1 compared with the previous day’s N1,828.06/£1, and gained N7.00 against the Euro to sell at N1,574.58/€1, in contrast to Thursday’s closing price of N1,581.58/€1.
For another trading session, the Nigerian Naira maintained stability against the Dollar in the parallel market and the GTBank forex counter on Friday at N1,375/$1 and N1,372/$1, respectively.
The Naira is expected to remain strong in the near term, backed by a rise in external reserves, which are nearing $50 billion, enhancing analysts’ confidence about its outlook in the second half of 2026.
Heightened global uncertainty has reduced the incentive for importers and corporates to demand FX, as cautious trade weighs on import needs. Analysts estimate a $40 billion net FX position for the year, a projection anchored in oil windfall gains.
As for the cryptocurrency market, prices remained depressed following a strong US jobs report that spurred markets to price in higher-for-longer interest rates, sending Treasury yields and the dollar up while hammering stocks, especially AI-related names. Crypto markets saw heavy leverage washouts with about $1.6 billion in positions liquidated over 24 hours.
Ethereum (ETH) gave up 4.9 per cent to trade at $1,584.68, Solana (SOL) fell by 3.3 per cent to $63.22, Bitcoin (BTC) crashed by 1.9 per cent to $61,333.23, Dogecoin (DOGE) slipped by 1.8 per cent to $0.0821, and Ripple (XRP) moderated by 1.8 per cent to $1.09.
Further, TRON (TRX) dropped 1.6 per cent to sell at $0.3197, Binance Coin (BNB) slumped by 1.0 per cent to $581.18, and Cardano (ADA) declined by 0.4 per cent to $0.1589, while the US Dollar Tether (USDT) gained 0.07 to sell at $0.9997, and US Dollar Coin (USDC) closed flat at $0.9998.
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