FG’s N72 Billion Distribution Expansion Programme Is A Commitment Towards Enhancing Power Distribution-Fashola
* Says amount was arrived at in consultation with the DisCos as to their priority investment areas within their franchise to improve evacuation of power to consumers
* Although the power sector Operation is now in private hands, Government is concerned, he assures
* Calls for consistency and understanding saying decision to privatize is a matter of policy and policies take time to take effect
* Lists Mini-Grids, Meter Asset Providers, among others as initiatives aimed at tackling post-privatization challenges
The Minister Power, Works and Housing, Mr. Babatunde Fashola SAN, Wednesday reiterated Federal Government’s commitment to enhancing the distribution segment of the Power value chain saying the approval of a N72 Billion Distribution Expansion Programme by the government was a clear demonstration of that commitment.
Speaking at the December 2018 Nextier Power Dialogue in Abuja, Fashola said the Government, as a 40 per cent shareholder, had to make the approval in order to enhance the distribution of power across the country pointing out that although operationally there is 7,000 Megawatts of electricity ready for deployment, the operation was still constrained at the distribution end.
Reiterating the concern of government towards correcting the anomaly, the Minister, however noted that the decision to intervene was done after asking the DisCos where they would want to spend their money within their franchise, if they have it, that could evacuate “some of the power that is available and that can yield a maximum collection report” adding that it was with that data that Government put the amount together that it would inject into the Distribution sector.
The Minister, who quoted the 3rd Quarter Report of the National Bureau of Statistics as revealing that Electricity made the highest contribution of 18 per cent to the 1.8 per cent growth in the nation’s Gross Domestic Product (GDP) recalled the “Thank You” visit of the Gora Community of Nasarawa State to his office early in the week to express their gratitude to the Federal Government over the provision of Solar Power to their Community saying it was a testimony to the growth in electricity supply and increasing accessibility to the rural communities.
The Community delegation, led by its Traditional Head, Alhaji Jafaru Adamu, thanked the government of President Muhammadu Buhari for initiating the rural electrification programme and the Minister for driving it adding that since the installation of the Solar electricity, the Community has consistently enjoyed several benefits hitherto not known to them, especially in the areas of social life, Education and Health.
Also the Minister seized the opportunity of a question to clear the air on an alleged statement made by him in 2014 as to his ability to solve the nation’s power problem in six months explaining that the statement attributed to him was made in 2015 in Lekki in respect of distributing power to the Lekki community within six months from the residual power in an Independent Power Plant earlier commissioned by him to power some government Water Works and Street lighting on the Island.
He declared, “I think it was in 2015 during the run up to the elections and I was in Lekki where we had gone to commission the Lekki IPP. It was Sam Amadi who gave us a license to do an IPP dedicated to power our Water works in Lekki, our Water Works in Victoria Island and our Water Works in Oniru and the street lighting in Lekki Phase 2.
“When we switched on that power plant that night and all of the street lights came on, as I was leaving, the residents accosted me and said “Governor you can’t go; we like this; but how would we get it into our houses”. I explained that it was Eko Distribution Company’s franchise and if they wanted the power in their houses, there was reserved power still in the IPP and if they could tell NERC to issue him a license, he would do the distribution and connect the Lekki residents in six months. That was what I said”.
The Minister recalled that the policy outline laid by his Ministry at inception set out a roadmap to first get incremental power and then go to steady power and then to uninterrupted power, which, according to him, “is not just a function of how much power you have”, but also “how you manage the power”.
“I think that if you followed the policy outline, we set out our roadmap first to get incremental power and then we will go to steady power and then to uninterrupted power and uninterrupted power is not just a function of how much power you have; it is also a function of how you manage the power. So in terms of our first leg of incremental power, we have delivered what we promised. We have increased the power on all sides”, he said.
Fashola pointed out the amount of diesel that he used to power his residence was now less than two years ago adding, “The man who buys the diesel knows and the man who supplies the diesel knows that I don’t buy as much as before. And that is the story from many parts for people on the grid. But that doesn’t mean that there are no problems”.
Responding to a question posed by a participant during the Interactive Session concerning the supply of transformers, Fashola, who reiterated that all the assets that the Ministry of Power used to control for power distribution have been sold by the last administration pointed out that the people now operating the Generation and Distribution segments of power sector are now privately owned companies.
The Minister added, “I am here because I am concerned. If your telephone is not working, it is not the Minister of Communication that you go to; let us be very clear. My role is regulatory, oversight and policy”, adding, however, “I cannot separate myself from the problem; I am trying to get involved to do what the law allows me to do. So the people you should be talking to about transformer is not me; the Ministry does not supply transformer anymore”.
In response to another question bordering on whether or not to cancel the Privatization policy and hand back power to the government, Fashola, who called for caution, declared, “Let’s be careful what we wish for. We wished, many years ago, after 60 years or so of government run power, we wished and decided that Private Sector should take over this Power. That was our decision. No sooner had we decided, five years after, we are now asking government to take it from them. Is that what we really want?”
“So let’s be consistent here and let us understand that the decision to privatize is a matter of policy. When policy is made, it takes time to take effect. When it begins to take effect, its impact takes time to spread. And that is why we can share here that five years ago nobody could talk about mini-grid, we are talking about it now; five years ago nobody was talking about Meter Asset Provider, we are talking about it today, five years ago who dared to go into the military formation to meter them; the President has directed that all the military formations must be metered”.
The Minister said ministries and agencies of government now pay their electricity bills regularly adding, “I just signed the letter for this month because our office is the collection warehouse. This wasn’t happening five years ago. So we are making progress and let no one downplay that”.
“Can we move faster, certainly we can”, he said adding, however, that if the consensus was that government should take it over the power sector from private hands, then there was need to “go back to Parliament and repeal the law; because I asked you, do you want a five-year old to have a moustache?”
Arguing against the reversal of the Privatization Policy, Fashola, who again reiterated the existence of challenges in the sector which, he assured were being dealt with, declared, “But you must decide in this country whether you want to continue to see devils or angels. I like to see angels; my glass is always half full and problems are opportunities for me to show that nothing is wrong with us and to benchmark what I have achieved. There are problems no doubt and we must deal with them”.
According to the NBS Report for Budget 3, the 3rd Quarter GDP result was 1.81 per cent growth; up from 1.50 per cent in Q2 with Electricity as the biggest motivator scoring 18 per cent, Metal Ores 17 per cent, Telecoms 14 per cent, Transportation 11.9 per cent Quarrying and Mining 3 per cent and, for the first time in about six consecutive quarters, the Services Sector grew by 2 per cent.
“It is not enough”, Fashola said adding, “But it means we are heading in the right direction back up. What is also important to share is that the growth was driven by non-Oil Sector and that is important because the growth came in a quarter when oil prices have not done well and that is what this team set out to achieve; to diversify the economy. We welcome the Oil money, but when the oil money suddenly disappears, our prosperity will not go with it and that is important”.
The Minister added, “So, in a period when oil prices began to flounder Nigeria’s economy did not flounder and that is important. But more importantly, who drove the growth? It means that if we continue with the foundations that are being laid-infrastructure- the jobs that all of us want to see will multiply. That is where we are”.
APC CONVENTION SATURDAY, 6TH OCTORBER, 2018
This is to inform FCT Residents, Visitors and Motorists that due to the National Convention of the All Progressives Congress, APC slated for Saturday, 6th October 2018 at the Eagle Square, Abuja, an unusual influx of human and vehicular traffic will be experienced within the city with the attendant traffic congestion in and around the venue of the convention.
To this effect all vehicular movement through Shehu Shagari Way from the early hours of Saturday, 6th October, 2018 to Sunday, 7th October will be diverted at Ralph Sodeinde Street by Bullet Building to link Central Business District. Motorists will also be diverted at Kur Mohammed Street and Constitution Avenue at Bayelsa House to Central Business District.
Traffic on Ahmadu Bello Way will equally be diverted at Ralph Sodeinde Street by Finance Junction to Central Business District. Motorists will also be diverted at Kur Mohammed Street or Constitution Avenue by Benue Building to link Central Business District.
The Federal Capital Territory Administration have mobilized Officers of the Police, FRSC, FCT Directorate of Road Traffic Service and other relevant Traffic Enforcement Agencies to various flash points to ensure seamless traffic flow.
Parking has been made available at the National Stadium for ALL Delegates coming from outside Abuja from where they will be conveyed to the venue by dedicated Buses.
In the same vein, ALL Delegates from within the FCT should converge at the Old Parade Ground from where they will be conveyed to the venue.
Please note that parking around the Eagle Square and its environs will not be tolerated as offending vehicles will be removed.
The understanding of the public is hereby solicited
Secretary, Transportation Secretariat
Federal Capital Territory
FG Commends Contractors On Quality Of Roads; Advocates For Alternative Funding Sources
The Federal Government has commended contractors handling various road and housing projects in the South South region for doing a good and quality job.
2. The Honourable Minister of State I for Power, Works and Housing, Hon. Mustapha Baba Shehuri expressed satisfaction on the quality of road rehabilitation and construction, as well as the construction of mass houses under the present administration, since its inception three years ago. He added that contractors are now fully back to sites with attendant effects on rejuvenating the economy and enhancing human capital development.
3. Shehuri noted that in tackling infrastructural deficits across the country, there is a dire need for alternative and innovative sources of funding beside the usual annual budgetary allocations, adding that government is presently using the SUKUK (bond) funding option and Public - Private - Partnerships (PPP) to bridge infrastructural gaps in the country.
4. The Minister stated this in Yenagoa, Bayelsa State during a working tour to the South South geopolitical zone to inspect ongoing projects being embarked upon by the Ministry.
5. Earlier in his tour, the Minister inspected the Dualisation of Lokoja – Benin road, Section II: Okene – Auchi, Section III: Auchi – Ehor, as well as Section IV: Ehor – Benin City.
6. He also visited the ongoing Dualisation of Sapele - Ewu road, sections I and II, Sapele - Agbor and Agbor - Ewu, respectively.
7. The Honourable Minister expressed satisfaction in the level and quality of work being carried out, especially in Bayelsa state inspite of the difficult terrain. He said this while inspecting ongoing construction works on Yenegwe – Okaki – Kolo road and the Dualisation of Yenegwe Road Junction – Kolo – Otuoke – Bayelsa Palm road.
8. While in Rivers State, the Federal Controller of Works, Engr. J. O. Fadire briefed the Minister on the progress of work on the Rehabilitation of Enugu – Port Harcourt Expressway, Section IV, Aba - Port Harcourt, as well as the 39 - kilometre Bodo – Bonny road with bridges across Afa, Opobo and Nanabie Creeks, the only one to link the Ogoni people with Bonny Island.
9. Engr. Fadire stated that though there are challenges affecting the pace of work such as the environment, compensation and youth restiveness, he, however, commended the contractor, Messrs Julius Berger (Nig.) Ltd. for the progress made within a short period of time. He further assured the Minister that the project will be delivered as scheduled because funding is not an issue as the major financiers, Messrs NLNG Ltd. is committed.
10. The Minister visited the construction sites of houses under the National Housing Programme (NHP), the second of its kind in the history of the nation since the President Shagari Low Cost Housing of the early 1980s, in Benin City, Edo State, Asaba, Delta State, Uyo, Akwa Ibom State and Calabar, Cross Rivers State. He also inspected the ongoing construction of the Federal Secretariat in Yenegoa, Bayelsa, where the Federal Controller of Housing in the State assured the Minister that the project will be completed by February, next year.
11. Hon. Shehuri noted that with the construction of these affordable Mass Housing Estates across the country, the present government is delivering on its campaign promise of bridging the housing deficit in the country, creating jobs and generating wealth.
12. The Phase I of the NHP projects, according to the Minister, have reached advance stages of completion and will be due for commissioning in the first quarter of next year, stressing that the houses are for all interested illegible Nigerians.
13. The Minister further disclosed that the procurement processes for the second phase of the Programme will soon be concluded and contracts awarded for its commencement in all the states that have provided the Ministry with land.
14. During the course of the Tour of Duty, the Honourable Minister also visited the 132 KVA Transmission Substations at Uyo and Calabar in Akwa Ibom and Cross River States, respectively, where the present Government installed and commissioned an additional 1 * 60 MVA Transformer each, in April.
15. While conducting the Minister round the Uyo Facility, the General Manager, Port Harcourt Region of the Transmission Company of Nigeria (TCN), Engr. Solomon Uyouko lamented that out of the 144 megawatts capacity of the transmission infrastructure, the DisCo utilise a meagre 2% daily, leaving most of the generated and transmitted power idle.
16. The story is almost similar at the 132 KVA Transmission Substation in Calabar, where the Acting Assistant General Manager, Engr. Nasiru Bello stated that out of the 192 megawatts transmitted daily, the DisCo evacuates between 20 - 30%.
17. Commenting on the unfortunate state of power distribution infrastructure in the country, Hon. Shehuri said the present scenario is unacceptable, while admonishing the DisCos to up their game or pave way for those with requisite capacities. He further urged Nigerians to start blaming the DisCos for lack of electricity, not the Federal Government.
Keynote Address Presented At The 32nd Annual Conference And General Meeting Of The African Union For Housing Finance (AUHF)
Theme: Housing and Africa’s Growth Agenda at PDTF Centre, Central Business District, Abuja, 14th -16th September, 2016. By The Honourable Minister of Power, Works & Housing; Babatunde Raji Fashola, SAN.
I am delighted to address you on the occasion of this 2016 Annual Conference and General Meeting of the African Union for Housing Finance (AUHF) holding in Abuja, Nigeria. The political will and momentum of the present administration in her housing sector agenda are further invigorated by this conference taking place few months after the June 2016 National Housing Summit. You will recall that the outcome of the recent National Housing Summit identified Housing Finance as one of the major pillars necessary for realizing Affordable housing delivery in Nigeria apart from others like Land, Concessions/incentives, Off-taker Strategy and General Skills Acquisition. It is indeed, heartwarming and reassuring to note that AUHF is an association of Mortgage Banks, Building Societies, Housing Corporations and other organizations involved in mobilizing funds for housing on the African continent. Also that the goals of AUHF includes promoting and facilitating housing finance and unlocking its multiplier effects on National economies, hence leading to Africa’s economic growth. I understand that the Conference attracts stakeholders from across the African Continent, all with the purpose of advancing investment in affordable housing.
2. Let me begin by thanking the Nigerian Mortgage Refinance Company (NMRC) and other partners for hosting this important conference. The hosting of AUHF 2016 conference in Nigeria could not have come at a more auspicious time than now that Nigeria needs aggressive unleashing of new housing finance investments and opportunities. I will also like to thank all the stakeholders and experts from Africa and around the world for coming together to proffer solutions to the age long challenge of providing housing finance for Africans, especially Nigerians that are facing harsh economic challenges.
3. Housing, we know is critical to every human development and fundamental right of every citizen. Therefore, Housing is central to this Administration’s policy thrust. However, housing a population of over 180 million is an arduous task that cannot be left for Federal Government alone, especially now that the Government’s revenue and the economy is under pressure. The fund to support the construction and mortgages for the end-users is a big challenge for the government. The production cost versus the selling price of the present housing stock is beyond the reach of majority of Nigerians. Demand for affordable housing has grown over the years as a result of population explosion, rural-urban drift and search for higher quality of life. This demand has rapidly overwhelmed the supply capacity of existing Government resources. Many years of inadequate investment and poor maintenance culture have left Nigeria with a significant housing deficit which is slowing down the country’s development and economic growth and will clearly require close collaboration from stakeholders like the AUHF. The above demanding task is the mandate of my Ministry, Federal Ministry of Power, Works and Housing. Therefore, all stakeholders especially the Private sector and AUHF must play major role in this process of creating innovative housing finance in Nigeria.
4. Every Nigerian’s dream is to have a roof over their head! Hence, for an average Nigerian "owning a house" is a mark of economic success and security. Housing is also believed to be a long term investment that protects that investment against high inflation and the unpredictable economic down turn. Therefore, provision of housing is a major tool to reduce corruption. Why is it so difficult for the average Nigerian to realize this dream? Lack of Housing Finance in the public and corporate institutions and double digit housing loans are the major culprits while others include land for housing, population explosion, high cost of building materials, inflation that brings about unemployment and decreased purchasing power of the low and medium income earners.
5. The major housing Finance trends and developments in the Nigerian market can be summarized by tracing the historical tendency of the influence of the financial sector in the housing industry. In 1956, a Secondary Mortgage Institution called Nigerian Building Society (NBS) assumed the role of the main conduit for housing finance delivery. NBS was a British and Nigeria partnership arrangement. Nigeria’s housing finance development can be classified under major political periods, namely pre-independence (1914-1960), post-independence (1960-1979) and a second and subsequent civilian administrations (1979 to date). However, the mortgage institutions decree No. 53 of 1989 led to the establishment of the following; Primary Mortgage Institutions (PMI) as mortgage savings for on-lending property development and mortgage creation. And, the Secondary mortgage institution, the Federal Mortgage Bank of Nigeria (FMBN), to function as the Apex mortgage institution for regulation. While the National Housing Policy of 1991 was a bold step by the Federal Government of Nigeria to address the challenge of lack of finance for housing development and mortgage. The National Housing Fund (Act. No. 3) of 1992 is a collating reservoir of long term funds in terms of monthly contributions from workers in the public and private sectors. Unfortunately, most Nigerians see mortgage loans from Government as part of their share of the "national cake" leading to high default rates. This has forced the Government to encourage prospective home owners to approach commercial banks who regrettably have high interest rates. Thus, the Government who is supposed to be a major player in the provision of homes is now seemingly not on the frontline. The Government established the Nigerian Mortgage Refinancing Company (NMRC) to help in reducing the cost of mortgage loan by improving market efficiency.
6. From the inception of Government initiative in organized housing finance system to date, only a meager sum have so far been injected to the system. This accounts for less than 0.5% of the Gross Domestic Product (GDP) as compared to other climes (like United Kingdom, South Africa etc) due to the inability of financial systems in providing low cost finance that meets the need of low and medium income earners. Therefore, the Secondary Mortgage institution (FMBN) should be strengthened by ensuring full compliance with the National Housing Funds (NHF) Act by affected stakeholders, like the Central Bank, commercial banks, insurance companies, Mutual and Trust Fund administrators. However, I am happy to note that with the greater participation of the private sector in housing and embracing the new initiatives of this Administration, the journey to sustainable housing delivery is on course.
7. Ladies and Gentlemen, it may interest you to note that the current Administration has taken cognizance of the housing sector as an important area requiring priority attention for reinvigoration and revitalization. This accounts for the appreciable budgetary allocation to the sector in the current annual estimate. This vision is increasingly being energized by the Federal Ministry of Power, Works and Housing. Only recently, the Ministry organized a National Housing Summit, where stakeholders met and examined the numerous constraints militating against the provision of affordable housing in Nigeria and proffered a clear, sustainable and strategic blueprint to mitigate same. Identified as a critical factor in the provision of affordable housing was lack of access to construction finance by developers including high risk in current mortgage finance structure which does not support the buying-off of houses to enable developers recoup their investments on time. The Summit resolved that there was need for necessary machinery to be put in place to promote appropriate construction finance schemes. AUHF members are hereby challenged in this regard. In the summit also, various definitions of affordable housing were adduced. However, the consensus from these definitions revealed that there is no one-size-fit all definition for Affordable Housing. The indices that should be used for defining Affordable Housing would include Segregation, Stratification, Classes of people and their income bracket, not more than one-third net household income of the target group and equity contribution of end-users.
8. I am happy to note that despite the challenges that housing delivery has encountered in the country over the years, the renewed vigor and policy re-orientation of this Administration have set the agenda for Housing revolution. In this regard, the Ministry has produced six (6) designs of one bedroom, two-bedroom, three-bedroom flats, bungalows and condominiums that will represent the Nigerian House which responds to our cultural diversity. Another key area of achievement is the pursuit and promotion of local content and standardization of building components such as doors, windows, tiles, roof boards and other accessories to be produced by local manufacturers as part of our support for local industries SMEs and in pursuit of diversification and job creation. Effort is already being made to embrace and deploy modern technology to mass production of housing in all the States of the Federation and FCT using the Traditional procurement platform and the Contractor Finance Initiative model, to reduce the housing deficit.
9. To make the Housing Sector attractive, viable and stimulate growth, the present Administration plans to de-risk lending to approved Housing Developers. This will entail the government providing guarantees and other credit enhancement to developers. Government therefore plans to issue promissory notes to reduce Developers financing requirements. Government recognizes that provision of leverage and guarantees are critical in attracting private sector funds into the industry thereby creating thousands of affordable houses each year as well as generate considerable employment and commercial activities. These are some of the far reaching contribution of the Finance Minister during the Housing Summit.
10. Ladies and Gentlemen, I wish to state here that much discussion has been held on the housing deficit. There is therefore need to change the story to begin to discuss the housing opportunities. Regardless of issues facing the sector, real estate projects are increasingly being launched and completed in Nigeria. With the present Administration’s many incentives, new investors are expected in the market to continue to deliver positive results.
11. It is on this note that I call on all stakeholders, especially members of the African Union for Housing Finance here present to join hands with the Federal Government towards the realization of its objectives in providing affordable housing to the people. As agent of change, members are enjoined to borrow a leaf from Nigeria and influence their respect home governments to domesticate or localize their housing options to reflect the peculiarities and expectations of the people as well as provide the private sector the needed impetus to invest in the sector.
12. Finally, I wish to state that though the challenges to the sector are real and obvious, we are convinced that with the renewed commitment of this Administration, coupled with strengthened collaborations with all stakeholders in the industry, the desired revolution in the housing sector will be achieved in not too distant future.
13. I wish you all very engaging and thoughtful deliberations and thank you for listening.
FASHOLA HASSAN RECEIVE HEAD AND LEADERS OF GORA COMMUNITY IN KARU LOCAL GOVERNMENT AREA OF NASARAWA STATE ON COURTESY THANK YOU VISIT IN ABUJA
Hon Minister of Power Works Housing Mr Babatunde Fashola SAN 2nd right Village Head of Gora Alhaji Jafaru Adamu right Elder in Community Prof Moh d Sani Haruna left and Farming Entrepreneur Hajia Kareen Fatimah Mohammad 2nd left shortly after a Courtesy Thank You Visit for the completion and deployment of 24 7 Solar Power in the Anguwan Neighborhood Villages of Gora Community in Karu Local Government Area of Nasarawa State by the Rural Electrification Agency REA as part of the Federal Government s Rural Electrification Strategic Implementation Plan at the Ministry of Power Works Housing Headquarters Mabushi Abuja on Tuesday 11th December 2018
FASHOLA INSPECTS THE ONGOING REHABILITATION OF OUTSTANDING SECTIONS OF ONITSHA ENUGU EXPRESSWAY ENUGU AMANSEA STATE BORDER IN ENUGU STATE AND UMUNYA AMAWBIA SECTION IN ANAMBRA STATE
Work in Progress Hon Minister of Power Works Housing Mr Babatunde Fashola SAN right speaking to media men shortly after inspecting the ongoing Rehabilitation of Outstanding Sections of Onitsha Enugu Expressway Enugu Amansea Enugu State border in Enugu State and Umunya Amawbia Section in Anambra State on Monday 10th December 2018