Stories by Blaise Udunze
Nigeria’s failing economic data are evidently a pointer to the fact that policy makers in the country would need to roll up their sleeves and get to work to save the economy from plunging into recession.
Statistics recently released by the Nigerian National Bureau of Statistics (NBS) showed that the Nigerian economy and Africa’s largest, contracted in the first quarter for the first time since 2004, as oil production slumped and the manufacturing, financial and real estate industries declined.
One of such critical sectors that urgently requires the attention of government to lift the economy from the woods is the power sector.
This is critical because developments around the world have proven that power supply is the most important catalyst for national development. With adequate power, people are empowered to work from the domestic level and the cottage industries, through the small-scale and medium industries to employment in the large-scale manufacturing complexes.
Unfortunately, over a period of time, Nigerian power sector has dropped abysmally to such a level that the average Nigerian does not feel the impact of the 2013 privatisation of the power sector, currently constrained by lack of market reflective tariffs in the distribution sector, gas-to-power challenges exacerbated by vandalism of power assets, circular debt that caused illiquidity in the sector and an unwillingness to grant bank guarantees or open letters of credit (LCs) for the sector due to perceived elevated risks.
That Nigeria with proven gas reserves of 118 trillion standard cubic feet (scf), according to statistics from the Department of Petroleum Resources (DPR), cannot get gas to fire its power plants while equally struggling with less than 4,000 mega watts (MW) remained a national embarrassment.
Nevertheless, there is hope for significant improvement in power supply in the days ahead as the Central Bank of Nigeria (CBN), has stepped in to address the liquidity and funding challenges facing the sector.
The bank had initiated a N213 billion Nigerian Electricity Market Stabilisation Facility (NEMSF) as a follow up to commitments it reached with other stakeholders to address debts owed by generating companies to gas supplies.
The loan was given at an interest rate of 10 per cent, with a repayment period of 10 years.
The apex bank believes that renewed funding commitments for Nigeria’s struggling power utilities should help catalyse new capital investments as the sector gradually gets de-risked.
Stakeholders also believe the development would enhance power generation and in turn create a significant economic boost in the country as power has been proven to be an enabler of other sectors of the economy.
Those who spoke argued that the ripple effect of an efficient and productive power sector will be felt across all sectors that rely heavily on power including agriculture, manufacturing and information technology.
So far, the CBN has disbursed a total of N120.2 billion to different electricity distribution companies (Discos), power generating companies (Gencos), service providers and gas companies.
The 4th tranche of the disbursement, which is under the N213 billion NEMSF, was made in Lagos recently. The latest disbursement totaling N55.5 billion went to 24 industry participants including three Discos, 14 Gencos, one service provider and six gas companies.
The Governor of CBN, Mr. Godwin Emefiele, while speaking at the disbursement ceremony, which also had the Minister of Power, Works and Housing, Mr. Babatunde Fashola, and other stakeholders in attendance, said, “we want to unlock the potential of the power sector and so this facility is meant to catalyse the power sector. The fund will be used to procure meters and spares they need to improve their business and stem power losses in the grid.”
He urged the firms to utilise the funds to upgrade their infrastructure.
Emefiele listed some of the areas where the funds are to be invested to include plant maintenance, upgrade of transmission and distribution networks, acquisition of transformers and effective metering of consumers.
Emefiele explained that the 4th tranche disbursement marked a major milestone in the effort of the bank, in collaboration with the Federal Government, to achieve a contract based electricity market. The event featured the signing of power purchase agreements by the Nigerian Bulk Electricity Trader (NBET) to signal activation of industry contracts for power generation under a contract based market.
The first disbursement under the NEMSF scheme was effected on February 12, 2015 to different players in the sector. That intervention resulted in the restoration of a total of 905mw of power into the national grid, among other impacts.
Specific reports from Gencos revealed that there was execution of capacity recovery programmes in three hydro power stations including intake under water repair project, overhaul of Unit 4 and compliant metering and supplementary protection at Shiroro Dam; overhaul of 2G6 at Jebba Hydro and rehabilitation of three units at Kainji Dam under permitted utilisations of the facility. A total of 300mw capacity increase was reported as a result of fund utilisation towards rehabilitation of both plants.
The intervention has also enabled the Electricity Distribution Companies (Discos) to provide bank guarantees to the Nigerian Electricity Bulk Trader (NEBT); purchase of over 171,071 units of meters comprising both maximum demand and single phase meters; rehabilitation of over 332kms of 11kv lines and 130km of 0.45kv lines; 70,310 No 500kva transformers procurement; and construction of 34 new distribution substations and acquisition of one mobile injection substation.
In his remarks, the Minister of Power, Works and Housing, Fashola, commended the CBN for its intervention to help resolve the issues in the power sector.
However, he assured the nation that incremental, steady and eventual uninterrupted power supply is achievable in the country while appealing that it could only happen if the citizenry cooperate with the government by taking ownership of and protecting the various power supply facilities across the country.
Also present at the event were CBN Deputy Governors, Dr. (Mrs.) Sarah Alade and Alhaji Suleiman Barau as well as chief executives of banks. Key players in the Nigeria electricity industry including the Nigerian Electricity Regulatory Commission (NERC), representatives of Discos, Gencos, gas companies and service providers, among many others, who were equally present at the ceremony, affirmed that the disbursement of the fund would lead to efficiency in power generation and distribution.
They agreed that the N213 billion NEMSF would also enable the power firms to speedily deliver on their commitments, noting that with the provision of the loans, Nigerians would begin to see improvement in power supply.
Sekibo salutes children as Heritage Bank rounds off banking month
Activities marking the Heritage Bank Children Banking Month peaked at the weekend with the celebration of the Nigerian child, when it feted children in the “biggest children’s party of the year” at the King’s College Annex grounds, Victoria Island, Lagos.
Sponsored by the bank’s kiddies account, the Bud Account, under the theme, “Taking the Early Lead,” over 700 children gathered to be treated to various great and exciting experiences that included both physical and cerebral exercises, in which many prizes were won to the delight of watchful parents who were also not left out of the fun.
The Managing Director of Heritage Bank, Mr Ifie Sekibo, congratulated the children on their special recognition and celebration by the country every year on May 27 because of the importance of their position as the destiny of our great nation, Nigeria.
Sekibo, who was represented by the Executive Director, Lagos/Southwest & Corporate Banking, Mrs Mary Akpobome, reiterated the objective of the bank to do all that it can to equip the Nigerian child with the requisite knowledge they require to be remarkable leaders of the future.
Consequently, the Managing Director said in keeping with the vision of the bank of helping its partners, including children, to create, preserve and transfer wealth across generations, the bank has introduced the first ever financial literacy comic book, “The Protectors, Keepers of the Heritage,” to teach children, in a fun way, rudimentary financial education and how to save and invest money for bigger things.
He urged them to stay focused in school and their academics. Said he: “I also want to let you know that you can be anything you want to be in the future if you listen to mummy and daddy and also to your teachers in school.”
The children, who had loads of fun and lots of refreshments at the event, which the MD said was a huge Heritage Bank family party, volunteered to give special numbers in songs, describing the bank severally as their hero, child-friendly and a bank that puts the young generation first, among others.
There were a variety of games for the young ones like bouncing castles, car rides, swimming, face painting, cycling, music, dancing competitions and lots of food, ice cream, drinks, cakes, popcorn for the children, who ran around in branded Bud Account shirts.
Get best exchange rate before traveling
Every traveller knows how important it is to have cash on hand when you travel. In most cases, it starts the minute you land—you’ll need the right currency for cab fare from the airport, and tips at the hotel whether you travel for personal or business trip. So, where can you find the best foreign exchange rates, and just as important… How do you access that rate? It all comes down to weighing both convenience and cost.
Assessing foreign currencies before travelling from Nigeria:
•Sale of Personal/Business Travel Allowance: Banks have re-commenced sale of Business Travel Allowance (BTA) and Personal Travel Allowance (PTA) at select branches across the country. This means that all intending travellers can now purchase foreign currency at designated branches of the bank up to a quarterly limit of $5,000 and $4,000 respectively or its equivalent in GBP and EURO.
•Details on requirements
-Customers cannot purchase both PTA and BTA on the same trip, but may purchase both within the same quarter
-Customers travelling to West African countries and places that do not require visa will not be allowed to purchase BTA/PTA.
-Only current account holders who have actively operated their accounts for a minimum of three months are eligible to purchase BTA/PTA and the account must have a registered Bank Verification Number (BVN).
-Customers can only purchase PTA for members of their immediate (i.e. nuclear) family which includes husband/wife and a maximum of two (2) children over 12 years old.
•Requirements for BTA and PTA – Business Travel Allowance (BTA):
– Valid visa and return ticket
– Valid International Passport
– Copy of Certificate of Incorporation
– Letter of Invitation from offshore business counter party
– Letter of nomination
•Personal Travel Allowance (PTA):
– Valid visa and return ticket
– Valid International Passport
•Assessing foreign currencies when in foreign country
Depending on where you travel, currency exchange rates can either help you get great bargains or make your trip surprisingly expensive.
No matter how strong your home currency is relative to the local currency, however, you want to make sure you’re getting the best exchange rate possible whenever you need to get cash or make a purchase.
1. Find out what your bank charges for foreign transactions. Most of the time, you will get the best possible exchange rate when you use your credit or debit card, either to make purchases or to withdraw cash from an ATM. By doing so, you get the same exchange rates that the banks offer to each other, with no middleman adding extra fees for the exchange. Some banks and credit card companies, however, will charge you a fee of as much as 3 percent on foreign transactions, so you need to do some research before you leave home. Call your bank and ask them what they charge. If they charge a fee, call around and ask other banks what they’re charging. You may be able to find a better deal, but you’ll need to plan well ahead.
2. Know the currency exchange rate. Before you set off for your trip, find out what the current exchange rate is. You can easily find this in many newspapers or online. Knowing the exchange rate is your most powerful defence against getting a bad deal, so find it out before you go, and periodically check on it while you are traveling. When you are abroad, don’t just trust the signs at street kiosks. Verify the exchange rate online if at all possible.
3. Use your credit or debit card as much as possible if there is no limit to withdrawal. As mentioned, you likely to get the best rate this way. Use your card for purchases as much as possible to avoid ATM fees. When you do use an ATM, be sure to check how much it will charge you–some foreign ATMs charge $5 or more. If the fee is more than a couple dollars, try to find another ATM.
4. Plan your budget while traveling. You don’t want to carry a ton of cash with you, but you also should try to have enough cash so that you don’t get stuck having to make a currency exchange at high rates. You’re more likely to get a good rate in large cities than in small towns–in some countries, you won’t even be able to exchange money outside the city.
5
Take out cash only as you need it, and try to plan your expenditures toward the end of your stay in any country. This will help you to minimize the risk of robbery or pickpockets and avoid getting stuck with excess cash when you leave.
6
Avoid the exchange companies and Cambio booths that you will see in most train stations and airports. They are convenient, and sometimes (especially in an emergency after banking hours) indispensable, but they frequently charge very high prices in return for the convenience. If you need to get cash, and you can’t find an ATM, your best bet is to go to a large bank, post office or American Express office.
7
Haggle. While you won’t be able to negotiate the rate at a bank, if you do get stuck changing money at a small vendor you may be able to haggle to get a better rate. It’s critical to know the exchange rate before you do this, and sometimes it won’t work, but it’s worth a try, especially if there are many vendors in a small area.
8
Compare rates. It’s especially important to shop around if you’re using the exchange kiosks, but the rate you get can vary even from bank to bank. Try at least two or three different places before you settle on one.
9
Know the “real” rate. Sometimes the low rate posted will be the “sell” rate–you’ll be charged the “buy” rate–or will only be applicable on very large or very small transactions. There may also be flat fees added to each transaction or extra commissions based on the amount of the exchange. You’ve got to watch out for these tricks and find out in advance the net amount you will receive from an exchange.