PPPRA Activities Attract Investments

Fri, Feb 28, 2014

By publisher

6 MIN READ

–

THE Petroleum Products Pricing Regulatory Agency, PPPRA, claims to have attracted investments worth more than N70 billion to the Nigerian economy through its activities in the past two years. Reginald Stanley, out-going executive secretary, PPPRA, said investments were mostly in the downstream sector of the oil and gas industry. “Many depots and jetties have been built by private initiatives, thereby generating thousands of jobs in the Nigerian economy,” he said.

Stanley said the performance by the PPPRA demonstrated that President Goodluck Jonathan’s transformation agenda was working and had successfully worked in the PPPRA. The out-going PPPRA boss thanked President Jonathan for giving him an opportunity to serve and Diezani Alison-Madueke, minister of petroleum resources, for creating a congenial atmosphere that made him to perform.

Stanley also thanked labour unions in the downstream sector for the industrial harmony recorded during his tenure. He said that his efforts at the PPPRA had paid off in the stability witnessed in the downstream in recent years. “One of the most remarkable achievements of my time was the stability of supply. During this period queues became a thing of the past. Nigerians no longer kept vigil at filling stations in their bid to purchase fuel. Today, the downstream has been completely sanitised. PPPRA’s processes and procedures are all aligned to global best practices. This has engendered confidence, transparency and accountability.” he said.

Stanley further noted that the PPPRA under his watch was able to reduce daily fuel consumption from 60.25 million litres per day in 2011 to 39.79 million litres per day in 2012. According to him, the agency in 2013 recorded 42.11 million litres per day, which was 18.14 million litres per day less than what was recorded in 2011. “What is so spectacular of the 2013 consumption is that it showed a modest increase of 5.5 percent on the 2012 figure in an economy growing at 6.9 percent per annum. Statistically, gasoline consumption tracks the Gross Domestic Product, GDP, growth very closely. Therefore, this was an excellent result. Equally arising from this reduction in volume of petrol is the huge savings to the subsidy payment of N409 billion in 2012 and N326.57 billion in 2013.”

Revenue Defaulting Discos

ONLY three out of the eleven power distribution companies in the country have so far remitted to the federal government the money due it. According to Nigerian Electricity Regulatory Commission, NERC, the development is regrettable in spite of the commendable improvement in revenue collection by the companies.

The commission noted in a document issued on its third meeting with the power sector operators, that the defaulting firms would be contacted to explain why they failed to file their statements of accounts. Usman Arabi, head, public affairs, NERC, said that most of the distributing and generating companies were up to date with their audit requirements for 2012, adding that out of the eleven Discos, nine had sent in their bank statements.

“The market operator’s response is being awaited for the matching review , which is going to be conducted soon. Despite an obvious improvement in collection, only three Discos made full remittances. Eight Discos did not meet baseline remittances. The NERC is to send out a notice to the defaulting companies to allow for explanation/justification for late filing of statements of account within a specified timeframe in line with due process,” he said.

The NERC also noted that it had informed President Goodluck Jonathan about the issue of indebtedness by the power firms and stressed that the federal government would not tolerate such an action. “The Chairman, NERC, Sam Amadi, informed the meeting that the required letter had been written to the President of the Federal Republic of Nigeria, emphasising the need for a service-wide circular communicating the grave consequences that non-payment will have on the sector.”

Ecobank Boosts Power Sector Investment

ECOBANK Nigeria is ready to boost the power sector with at least $5 billion per annum over the next five years, starting from this year. This, according to a statement by the bank, is in line with its policy to support the growth and development of the power sector in the country. The bank said it had played a major role on the buy-side of the power sector privatisation exercise by providing financial advisory services, playing lead arranger role and providing guarantees to distribution and generation companies as well as national integrated power plants, among other things.

Olufunke Jones, country head, power and energy, Ecobank, said the bank was keen on playing an active role at all levels namely generation, distribution and transmission of the sector’s privatisation. Jones, who said Nigeria had one of the largest gaps between demand and supply of electricity, explained that to bridge the gap, the country required a combination of favourable government policies, private sector participation and Foreign Direct Investment as well as transparency.

According to Jones, the power sector reform has created opportunities for capital expenditure and operating expenditure funding, which is a consequence of the handover to the new owners. “There is the urgent need to rehabilitate the distribution networks in order to make them robust and flexible enough to accommodate the nation’s demand for power.”

On her part, Funmilola Ogunmekan, local account manager, corporate banking group, Ecobank, said unlike the telecoms industry where new investors were able to take advantage of new technologies to redefine industry norms, the power sector was faced with the challenges of upgrading mostly obsolete equipment and processing under a traditional technology framework. This, among others, “is the immediate challenge before the potential of the industry is fully manifested,” according to the manager.

Ogunmekan said that in 2014, Ecobank would leverage its position as a bank with the third largest branch network to provide effective utility collections and cash management services while providing  additional funding requirement for at least five of the distribution companies in the country. Already, she said, Ecobank had partnered the companies to put in place an effective and seamless utility collection system devoid of leakages and supported by a robust information technology infrastructure.

Compiled by Anayo Ezugwu 

— Mar. 10, 2014 @ 01:00 GMT