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Economy

Reps to Investigate Reason for Declining Value of Naira

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Reason for Declining Value of Naira

By Dipo Olowookere

The recent decline in the value of Naira at the foreign exchange (FX) market, especially at the unregulated segment, is becoming worrisome to the lower chamber of the National Assembly.

On Tuesday, the matter was tabled before the green arm of the parliament by a member of the House representing Jere Federal Constituency, Borno State, Mr Satomi Ahmed, under a matter of urgent national importance.

In his motion, which was seconded by Mr Idem Unyimen, he argued that if nothing was done to bring the situation under control, the nation may suffer for it.

According to him, if the value of the local currency continues to depreciate against key foreign currencies like the United States Dollar, the British Pound Sterling and the Euro, the nation’s economy may slip into crisis.

He said there’s a need for an urgent intervention to save the Naira that seems to be going into obscurity despite interventions by the Central Bank of Nigeria (CBN) to shore its value against other currencies.

The central bank, in an effort to save the Naira, does regular interventions by boosting FX liquidity in the market through the sale of forex to traders to meet the demands of customers. It also further introduced a promo called Naira 4 Dollar, which allows beneficiaries of diaspora remittances to receive N5 for every $1 sent to them.

The scheme, which was introduced on March 8, 2021, and was supposed to end on May 8, 2021, was later extended indefinitely.

But at the plenary today, after Mr Ahmed moved his motion, another lawmaker, Mr Toby Okechukwu, proposed an amendment to the motion, noting that the situation does not require a legislative summit over the issue as neither Foreign Direct Investments (FDIs) are coming to Nigeria nor the insecurity challenges facing the country abating.

He emphasised that the state of the Naira was a matter of market forces and then suggested that the House should launch an investigation into the circumstances behind the unabating falling value of the Naira.

This amendment to the motion was seconded by Mr Wale Raji and was voted and adopted as amended.

In recent times, the Naira has slumped significantly against the US Dollar at the FX market, forcing the CBN to devalue the domestic currency.

The most recent one was the adjustment of the interbank exchange rate to N410/$1 from N379/$1 as the apex bank adopted the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) rate as the official exchange rate.

The NAFEX rate is used by investors through the Investors and Exporters (I&E) window and at the close of business today, the Naira was traded at 411.75/$1 in contrast to N411.50/$1 it traded on Monday, indicating that it depreciated by 25 kobo or 0.06 per cent.

But at the black market, the Nigerian currency closed flat against the greenback at N505/$1 on Tuesday

At the moment, Nigeria operates these three exchange rate segments despite calls for a unified exchange rate regime from different quarters, including from the International Monetary Fund (IMF).

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

Sanwo-Olu Slams FG for High Cost of Cooking Gas

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Sanwo-Olu Cost of Cooking Gas

By Modupe Gbadeyanka

**Moves to Ramp up Supply, Crash Price

Governor Babajide Sanwo-Olu of Lagos State has slammed the federal government for being behind the high cost of cooking gas in the country.

Speaking on Thursday at the commissioning of a 40 metric tons Liquefied Petroleum Gas (LPG) refill plant in the Ikorodu area of the state, he attributed the rising price of gas to the introduction of 7.5 per cent VAT and foreign exchange (FX) crisis, a statement posted on the Facebook page of the state government disclosed.

According to him, these issues caused the spike in the price of the product, saying this was “unacceptable” in the face of the high cost of living.

However, he assured that this may soon be a thing of the past as his administration has taken a huge step to ramp up supply and make the product available to residents at cheaper rates.

The new plant in Ikorodu is operated by the state-owned energy firm, Ibile Oil and Gas Corporation (IOGC), and it is the fourth delivered by the corporation. Three other refill plants of varying capacities were built in the Amuwo Odofin, Alimosho and Iponri areas of the state.

The Governor disclosed that his administration decided to establish the plants to cut down the use of dirty fuels responsible for carbon emission and air pollution.

According to him, the energy project was initiated to key into the nation’s ambitious goal to develop the natural gas industry and encourage domestic use of safe cooking gas.

In Lagos, less than 30 per cent of households use gas for cooking. As an alternative to kerosene and charcoal, LPG is a clean-burning fuel that supports smoke-free indoor and outdoor cooking.

Mr Sanwo-Olu said the inclusion of gas into the state’s energy mix was critical to the continuous prosperity of Lagos, stressing that the project would not only transform the State into a gas economy and stimulate commercial growth but also enhance the quality of life by reducing carbon footprint in the environment.

The target, the Governor said, is to increase the supply of cooking gas in local communities, thereby raising domestic LPG usage from the current 25 per cent to about 80 per cent before the end of 2023.

He said: “The gas plant being commissioned today reflects the desire of our administration to align with the global action to reduce carbon emission and address the climate change challenge. One of the measures, which this gas plant will support, is promoting increased adoption of LGP for domestic use in Lagos.

“Our vision is to transit the State into a gas economy and ensure an energy mix that provides different fuelling options for residents with the introduction of Gas-for-Transport and Gas-to-Power projects. Expanding the domestic usage of LPG is critical to the continuous prosperity of Lagos and the attainment of our administration’s desire to transform the State into a 21st-century economy.”

Mr Sanwo-Olu said the increment in LPG price puts the nation at the risk of reversing all gains achieved from awareness of the advantages of using LPG for domestic cooking.

The Governor urged the federal government to reverse the trend in order to make the commodity affordable, while also increasing the availability of safe cooking gas in the country.

He said: “Not only are we excited with our modest intervention by Lagos in the LPG market, but it is also only when we reduce the cost of basic commodities such as cooking gas that the true dividends of democracy can be felt by the people.

“We have done a lot of advocacy for people to appreciate the benefit that comes with the use of gas for domestic cooking, such as reduction in carbon footprint, and improved quality of life. If we have made this great effort, the least the government can do is not to make the commodity unaffordable for the populace.”

The Commissioner for Energy and Mineral Resources, Mr Olalere Odusote, said the plant was built with the highest safety standards, noting that the siting of the facility was deliberate to serve a large number of the populace.

He said the state had the plan to expand the gas facility to 20 units which would be spread across all divisions.

Managing Director of IOGC, Ms Doyin Akinyanju, said the gas plants developed by the corporation had the capacity to supply 20,000 homes within the radius of operation, adding that jobs were created for young people in the supply chain through the use of purpose-built vehicles for door-to-door delivery in neighbourhoods.

She said: “Nigeria has an abundant gas deposit that needs to be rapidly developed. Lagos also is blessed with two known offshore fields – Aje and Ogo – in Badagry with large gas deposits. IOGC is taking steps to develop a bulk offtake facility that will ensure gas security in Lagos, as well as provide a competitive pricing advantage.

“We will continue our sensitisation and awareness campaign in the neighbourhoods where we are located to take Lagosians away from the use of dirty fuels like firewood, charcoal, kerosene to Gas for cooking. Today, we start a new journey with cooking gas by creating a market that will make it safely accessible.”

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Economy

Our Post-paid Customers Owe N115bn—JED Cries Out

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Jos Electricity Distribution Company JED

By Adedapo Adesanya

The Jos Electricity Distribution Company (JED) has said that post-paid customers across its franchise states are indebted to the company to the tune of N115 billion.

This was disclosed by the Managing Director of the company, Mr Hashim Bakori, who explained that the debt owed was different from the cost of energy losses as a result of energy theft.

He said this was discovered after 16 months of hard work after resuming office with his team as the new management of JED.

Mr Bakori disclosed this in Jos during the launch of the company’s 5-years Corporate Strategic Plan to kick start a new goal to be achieved by the organisation.

‘If nothing is done to bridge the gap, a lot will go wrong and that is why we are launching the Corporate Strategic Plan and by the time we are done, people will start seeing the improvement of energy supply across our franchise states.

“We have consulted reputable companies in the world to come and partner with us in moving the company forward.

“From today, you will see a very new Jos DisCo,” he said.

Mr Bakori, however, pointed out that despite the several efforts put in by the new management of JED, vandals and energy thieves still remain a challenge to the company.

“Despite these efforts, the company is currently bedevilled by some man-made challenges. These challenges range from vandalism and theft of our installations, energy theft to customers huge indebtedness to the company.

“In 2021 alone, vandals and thieves have torched about 200 distribution transformers, armoured cables, copper earth wires, transformer oil, feeder pillar copper bars, several spans of aluminium conductors, line insulators etc,” he said.

Headquartered in Jos, Plateau State, the company operates one of the longest distribution networks in the country. It caters to over 400,000 customers in the franchise regions of Plateau, Gombe, Bauchi and Benue States.

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Economy

NUPENG Extends Planned Nationwide Strike by One Week

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NUPENG strike

By Adedapo Adesanya

The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has extended the 14-day ultimatum earlier given to the federal government by one week.

This was disclosed in a statement issued by the union’s General Secretary, Mr Afolabi Olawale, in Lagos.

He said that in spite of the various interventions and engagements with government agencies and institutions, issues concerning the welfare of members and unfair labour practices by some oil majors had yet to be fully resolved.

Business Post had reported that NUPENG issued the 14-day ultimatum on November 15, threatening to embark on a nationwide strike due to what it called non-implementation of an agreement earlier reached with the government.

The issues at stake include non-payment of workers’ salaries and title benefits, among others.

In the latest statement, Mr Olawale said, “Leadership of the union is still exercising further patience and restraint to give the ongoing discussions the chances of resolving these issues once and for all.”

“The decision of the union to give another seven-day ultimatum should not be misconstrued as a sign of capitulation or weakness.

“Rather, it is a demonstration of our resolve not to inflict unnecessary pains on Nigerians or create any form of artificial scarcity of petroleum products,” he said.

The NUPENG general secretary urged the government and all other concerned entities to take advantage of the extension to do the needful.

“It is our hope that government does the needful and save the nation the pains and losses our industrial action will bring,” he said.

Oil majors had recently come under renewed scrutiny from many groups for their role in the country with issues ranging from employees welfare to oil spills to taxation.

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