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CBN bars foreign oil firms from repatriating 100% FX proceeds at once

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The Central Bank of Nigeria (CBN) has stopped international oil companies from repatriating 100% foreign exchange proceeds to their mother companies overseas at once.

The apex bank said international oil companies can repatriate 50% of their proceeds in the first instance and then the other half after 90 days.

The Director of Trade and Exchange Department at the apex bank, Hassan Mahmud, made this known in a circular dated February 14, 2024.

The CBN said it observed that proceeds of crude oil exports by International Oil Companies (IOCs) operating in Nigeria are transferred offshore to fund parent accounts of the IOCs in a phenomenon described as “cash pooling”.

“This has an impact on liquidity in the domestic foreign exchange market,” the apex bank stated.

“In line with the ongoing reforms in the foreign exchange market, it has become necessary to take measures to address this trend. Consequently, the CBN hereby directs as follows;

“Banks are allowed to pool cash on behalf of IOCs, subject to a maximum of 50% of the repatriated export proceeds in the first instance;

“The Balance 50% may be repatriated after 90 days from the date of inflow of export proceeds.”

 

Economy

Naira appreciation: FCCPC vows to monitor, investigate price hike

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The Federal Competition and Consumer Protection Commission (FCCPC) has resolved to monitor and investigate unusual

The Federal Competition and Consumer Protection Commission (FCCPC) has resolved to monitor and investigate unusual hikes in prices of goods and services.

Ag. Executive Vice Chairman/Chief Executive Officer, Dr. Adamu Abdullahi in a statement issued on Wednesday said it was unacceptable that despite the recent appreciation of the Naira against the Dollar, consumers continue to face escalating costs without a corresponding decrease in prices.

It added that while it cannot directly regulate prices, the Commission would utilise its existing legal framework to enforce fair competition and consumer protection provisions.

It said: “The Federal Competition and Consumer Protection Commission (FCCPC) is aware of the concerns expressed by Nigerians regarding the continued rise in prices of goods and services.

“Despite the recent appreciation of the Naira against the dollar, consumers continue to face escalating costs without a corresponding decrease in prices.

“This situation is unacceptable, and the FCCPC is committed to protecting consumers from exploitation.

“The FCCPC understands the significant financial strain these rising prices are placing on Nigerian households. As a result, the Commission is taking proactive steps to address this issue.”

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Economist urges Tinubu, NERC: scrap Band A, B, C Tariff hike

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Economist urges Tinubu, NERC: scrap Band A, B, C Tariff hike

Ayo Ayalowo, a development economist, says President Bola Tinubu’s administration and the Nigerian Electricity Regulatory Commission must jettison the bands A, B, and C because Nigerians are not getting power supply.

He said this on Tuesday during an interview on Channels Television monitored by DAILY POST.

He noted that increases in energy prices, such as electricity and diesel, are major propellants for soaring inflation in Nigeria.

According to him, the government should rejig its recently announced 240 per cent electricity tariff hike for Band A customers getting 20 hours of power supply.

He stressed that Nigerians are not getting the power supply despite the tariff hike.

“The energy prices, especially this Band A, Band B, and C nonsense, need to be jettisoned. And a sensible approach must be taken so that Nigerians can enjoy electricity at a reasonable cost. NERC needs to go back and rejig the tariff and stop the nonsense band classification because Nigerians are still not getting power supply”, he stated.

He suggested that the government should increase tariffs marginally for electricity customers nationwide.

“I will suggest that the Minister of Power and Nigerian Electricity Regulatory Commission would have increased tariff marginally across the board, not cheating Paul to pay Peter as they are doing”, he added.

Recall that on April 3, 2024, NERC announced a hike in the electricity tariff to N225 per kilowatt-hour from N66 for customers in Band A.

However, the hike was condemned by Nigerians, including the Nigeria Labour Congress, Trade Union Congress, and other organisations.

Nigerians continued to lament that the power supply had dropped since the tariff hike.

On Monday, the country was plunged into another complete darkness due to the national grid collapse.

Meanwhile, the Transmission Company of Nigeria, TCN, blamed the grid collapse on a fire incident, noting that power had been restored.

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FG secures $750M World Bank loan for Solar subsidies in Nigeria

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The federal government plans to provide subsidy to developers and operators of solar mini-grids in unserved and underserved areas

The federal government plans to provide subsidy to developers and operators of solar mini-grids in unserved and underserved areas in the country.

The subsidy will be provided through a World Bank approved loan of $750 million under the Distributed Access through Renewable Energy Scale-up (DARES) project.

This was disclosed in the financing agreement for the loan project seen by Nairametrics. The financing agreement for the loan was signed by the Minister of Finance, Wale Edun, on March 31, 2024, and World Bank’s Country Director for Nigeria, Shubham Chaudhuri, on February 19, 2024.

The loan project is fundamentally aimed at augmenting the supply of electricity to both households and micro, small, and medium-sized enterprises (MSMEs) through a surge in private sector-led distributed renewable energy initiatives.

The document noted that the loan will be partly used to provide “Support to the development and operation of privately owned and operated solar hybrid mini grids in unserved and underserved areas through: 1.1. Minimum Subsidy Tender Carrying out of Minimum Subsidy Tender processes and provision of Minimum Capital Cost Subsidies to selected developers/operators of: (a) Isolated mini grids; (b) Interconnected mini grids; or (c) Solar rooftop solutions in Participating States.”

Asides from providing subsidy, the federal government plans to also provide performance-based grants.

The document noted that there will be “Provision of Performance-Based Grants to eligible mini grid operators based on new customer connections for isolated mini grids and percentage of capital expenditures for interconnected mini grid projects.”

The grant will also cover Standalone Solar (SAS) Systems for Households, MSMEs, and Agribusinesses. This grant will provide “Support to the expansion of SAS systems for households, MSMEs, and agribusinesses in rural areas through: 2.1. Performance Based Grants for Standalone Solar Provision of Performance Based Grants (“PBGs”) to eligible companies to rapidly deploy SAS solutions in rural and underserved areas, through supply and demand side support and based on independently verified outputs, and to support deployment of solar productive use of electricity (PUE) equipment to MSMEs, agribusinesses and commercial customers.”

There will also be “Catalytic Grants Provision of Catalytic Grants, on a matching basis, to eligible SAS companies that target the poor, remote, or hardest to reach consumers in the country.”

The loan from the World Bank is structured into three distinct segments, cumulatively forming the $750 million total financial package. This package is segmented into credits of $350 million, $250 million, and $150 million, each earmarked for different facets of the project and subject to currency conversions as necessary.

The primary implementers of this project are the Rural Electrification Agency (REA) and the Lagos State Electricity Board (LSEB), with significant support from the Federal Ministry of Power, the Nigerian Electricity Management Services Agency (NEMSA), the Federal Ministry of Environment, the Nigerian Electrification Regulatory Commission (NERC), and the Federal Ministry of Finance.

Alongside varying interest rates, the principal payments will be done as follows:

The project’s loan terms are delineated with a Maximum Commitment Charge Rate of 1/2 of 1% per annum on the unwithdrawn financing balance.

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Economy

AfDB obtains $110,000 grant to support Ekiti’s electricity initiative

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The Ekiti State Commissioner for Infrastructure and Public Utilities, Prof. Bolaji Aluko, who made this known in Ado Ekiti, stated

The Ekiti State Commissioner for Infrastructure and Public Utilities, Prof. Bolaji Aluko, who made this known in Ado Ekiti, stated that the funds were secured from the Sustainable Energy Fund for Africa (SEFA).

According to him, the fund approval was made possible after the state requested a grant to support the establishment of the Power Sector Reform Desk in his Ministry for mainstreaming decentralised renewable energy solutions.

Aluko explained that the funding approval, secured through the Africa Energy Sector Technical Assistance Programme (AESTAP), would sponsor three delegates from the state to participate in a hybrid training course on power sector regulation at the Africa School of Regulation (ASR), in addition to consultancy services.

He assured that the Ministry would leave no stone unturned to ensure a steady supply of electricity, potable water, responsive fire services, and an efficient telecommunication system in the state.

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Economy

Minimum wage committee to reconvene mid-April

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Minimum wage committee to reconvene mid-April

The 37-member tripartite committee on minimum wage set up by the Federal Government will reconvene mid-April to continue further negotiations and consultations on the new minimum wage expected to be announced by President Bola Tinubu on May 1, 2024.

The National Treasurer of the Nigeria Labour Congress, Hakeem Ambali, who is also a member of the tripartite committee, made this known in an interview with our correspondent in Abuja on Sunday.

Ambali noted that the committee members are still collating and analyzing the reports received from the zonal public hearings.

The committee had received the reports of zonal public hearings held across the six geo-political zones of the country between Wednesday, March 27, 2024 and Thursday, March 28, 2024.

The minimum wage to be unveiled is expected to cushion the effects of the removal of subsidy on Premium Motor Spirit.

During the public hearings, different zones had suggested different amounts for minimum wage.

The South West zone had suggested N794,000; the North East proposed N560,000 as minimum wage; North West proposed N485,000; the North Central proposed N709,000; South South demanded N850,000 while the South East demanded N540,000.

Speaking on the outcome of the recently held meeting, Ambali simply said, “ We have been compiling and analysing zonal reports.”

When asked about the date fixed for the next meeting of the committee, he said, “Mid-April.”

Tinubu, through Vice President Kashim Shettima, on January 30, 2024, set up the 37-member panel at the Council Chamber of the State House in Abuja.

With its membership cutting across federal and state governments, the private sector, and organised labour, the panel is to recommend a new national minimum wage for the country.

In his opening address, Shettima urged members to “speedily” arrive at a resolution and submit their reports early as the current N30,000 minimum wage expires at the end of March 2024.

“This timely submission is crucial to ensure the emergence of a new minimum wage,” Shettima said.

In May 2017, the House of Representatives moved to amend the National Minimum Wage Act for a compulsory review of workers’ remuneration every five years.

Source: Punch News

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Economy

Hardship: Buhari sold Nigeria’s future – Gov Mutfwang

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Being Nigeria president, hardest challenge in life — Buhari

Governor of Plateau State, Caleb Mutfwang, on Monday, accused former President Muhammadu Buhari of being responsible for the current economic hardship being faced by Nigerians.

Mutfwang specifically said that “we sold our future under the last administration.”

The governor spoke on Monday during the swearing-in of 22 Special Advisers and heads of government agencies at the Government House in Jos.

“We are at a very difficult juncture in the history of this country and I’m an advocate that after the election you forget politics and face governance.

“And even though the Federal Government is being led by a party other than my own, I owe you the duty to tell Nigerians the truth that this government inherited a worse situation than 1999.”

Mutfwang said Buhari left the country’s economy in terrible shape for his successor, President Bola Tinubu.

He said: “This government inherited an economy where we simply printed money up to the tune of N30tn and shared.

“This government inherited an economy where the crude oil we’re yet to take out of the ground had been sold in advance.

“So, when you’re talking about the fall of the naira, it’s not rocket science. We sold our future under the last administration.”

According to him, this explains the hunger and widespread looting of warehouses and food stores across the country.

“No wonder you’re hearing of riots today, people intercepting food on the way. We are lucky on the plateau that perhaps we have more food than many other states.

“And I pray that the time will not come on the Plateau that we will see this kind of riot for food, but it means we must roll up our sleeves and get to work.

“And that is why, for us as a government, when we announced one of the positions that talked about food security, people were laughing but it is a serious issue,” he stated.

Mutfwang further said his administration plans to set up a special agro-processing zone in the Barkin Ladi Local Government Area in partnership with the African Development Bank to the tune of $300m.

He urged the new appointees to help the administration to reverse the ugly situation in the state for the good of the people, adding that Plateau people have suffered enough distraction.

“You know of the bloodshed on the Plateau. The time is now to say enough is enough,” he added

It was reported that the National Security Adviser, NSA, Nuhu Ribadu, had disclosed that the financial distress currently plaguing the country was a direct result of President Bola Tinubu’s administration inheriting an empty treasury upon assuming power a few months ago.

Ribadu acknowledged the severe financial constraints affecting budgetary allocations but reassured the nation that the federal government was committed to maintaining a robust and viable defense management and mechanism.

Meanwhile, the country has been hit with a food crisis and soaring prices of goods and services, leading to looting of food stores and warehouses across the country.

 

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