There are indications that the Federal Government may be on course to meet and perhaps, surpass the projected oil revenue target in the 2021 budget if the recent rise in the prices of crude oil is sustained into the new year.
Investment analysts observed that besides meeting the oil revenue target, Nigeria also stands the chance of reducing the budget deficit estimated at N5.2 trillion and the government’s borrowing to fund the budget if the ongoing surge in the international oil price is sustained for the rest of 2021.
The prices of Brent Crude surged above $50 per barrel last week (20% above the budget benchmark) following optimism that the global Gross Domestic Product (GDP) is recovering from the Covid-19 pandemic on the back of vaccine discovery and hope of distribution and also reflects the ability of the Organization of the Petroleum Exporting Countries (OPEC) plus Russia (OPEC+) to enforce some level of collective production cuts.
Meanwhile, the federal government has estimated that revenue from oil sales would contribute not less than 25.5 per cent to its 2021 revenue target after setting oil revenue projection at N2.01 trillion.
Following the projections, the federal government had also set the oil price benchmark at $40 per barrel, while daily oil production is benchmarked at 1.86 million barrels per day.
Vanguard Public Finance analysis shows that collections from oil revenue for the third quarter ended September 30, 2020(Q3’20) stood at N953.09 billion, N1.06 trillion or 52 per cent and 63.9 per cent short of the 2020 and 2021oil revenue targets respectively.
Despite the shortfall, investment analysts have said that the FG may still attain the target but stated that realisation of the target would also depend on maintaining the oil production target throughout the year.
Further breakdown showed that collections from oil revenue in Q3’20 was 25 per cent and 28.9 per cent lower than receipts in Q2’20 and Q3’19, respectively, but represented a 7.6 per cent increase above the revised benchmark of N886.16 billion for the period.
Experts’ opinion
Financial experts who spoke to Vanguard Public Finance explained that global oil price above US$50 would enable the country to achieve the oil revenue target and would lead to improved dollars’ inflow into the country.
Victor Chiazor, Head of Research, FSL Securities, said:-
“The rise in crude oil prices remain positive to the Nigerian economy. Given the 2021 oil benchmark price of US$40.00 per barrel, a global price above US$50 per barrel will effectively enable Nigeria achieve its oil revenue budget once our oil production volumes are not affected during the period.
“A higher oil price for the fiscal 2021 period will also help reduce the budget deficit and reduce government borrowing needed to fund the 2021 budget.”
He, however, said that the government needs to focus on revenue sources to cushion the impact on any unforeseeable occurrences in the oil market that may negatively affect the revenue target.
He said:-
“We, however, need to remain cautious with regards to oil prices remaining above the US$40 budget benchmark for the entire fiscal year 2021, as there remains significant headwinds which may drive oil prices lower in the short term and therefore we need to focus on other revenue sources for the federal government outside of crude oil.”
Corroborating him , Ayodeji, Ebo, Senior Economist/Head, Research & Strategy, Greenwich Merchant Bank, said:-
“The uptrend in crude oil prices is positive for Nigeria given the high dependence on oil revenue and historical shortfall in non-oil revenue. With the oil price above the budget benchmark, the government should be able to meet up with its projected revenue from oil,
“However, the downside risk is the OPEC + production cut which is significantly lower than 2021 budget projection. Recall that the excess above the budget oil price benchmark is kept in the Excess Crude Account which is the savings for the raining day. To avoid continuous revenue vulnerability to crude oil prices, there must be increasing effort towards improving the non-oil revenue target.”
In their own views, analysts at Coronation Merchant Bank, said: “As a rule of thumb, Nigeria’s public finances work well when oil trades consistently above US$50 per barrel. Oil provides (in a good year), the federal government with upwards of 60 per cent of its revenue and supplies the country with over 80 per cent of its export earnings.
Since much of these earnings are banked by the Nigerian National Petroleum Corporation (NNPC) with the Central Bank of Nigeria (CBN), this is a crucial source of foreign exchange (FX). So, for example, the long period of low oil prices from the end of 2014 through to mid-2017 (the price of Brent averaged US$45.10/bbl in 2015 and US$56.09/bbl in 2017) led to a depressed level of CBN FX reserves.
This precipitated two devaluations in the interbank exchange rate, from N199/US$1 to N316/US$1 in mid-2016 and from N316/US$1 to N357/US$1 in August 2017.
“Therefore, the recent rise in the price of Brent comes at a good time for the CBN. This year the CBN has avoided the fate it suffered in 2016 and the first half of 2017, namely a level of reserves below US$30.00bn (the current reported level is US$34.97bn). The cost of this preservation has been a sharp reduction, starting in March, in the CBN’s supply of US dollars to the NAFEX market.If an oil price above US$50 per barrel takes root in 2021, it will be tempting to think of the nation returning to normal.
Normal, in this instance, means a healthy inflow of US dollars from oil that supports the revenues of the government and allows the CBN to be supplier of last resort to the foreign exchange markets.Therefore, an oil price above US$50 per barrel brings the prospect of improved US dollar inflows.”
Grd
So how much are will going to be buying the fuel in 2021
Hmmm
Ok
Wow
Kk
Ok
Hmm
Like that
toh
Nigeria government do what is right for this country
Oil is really the heart of Nigeria
Hmmm
Kk
oh really
Such a huge sum of money chaii
Okay
Hmmm
Hm
Hmmmm
Kk
Hmmm
Hmmmm
Ok
wahala dey ooh
Na only God can save us
hmmm
Hmmmm
Hmmm why na
hmmm wahala fa
All is well
Hahaha
Hmmmm
Hnnnn
Really
What a country
Hm
KK
Ol
Good
Hmmm
Great
Like seriously
Hmmmmm
Good
Alright
Good
Ok
yeah
What’s,this is unbelievable
Unbelievable
Catapila
Hmmmm
Yes
hmmm toh
There w money in this country oooo
Just like that
Fuel must be available at cheap price oo
Why is the price of oil rise
What is done is done so be ready for 2021
Okay
Okay
Kk
Okayy
Hahahaha
Hmm naija
I’m speechless
Let see how it goes
Nawa o
Wow
May God help us
Nice
Good
Ok
Wayo
Dis is bad
No wonder
Hmmmm
G
Hmmmmmm
wale
They should go and borrow ooooo
Yawa
So how much are we going to be buying fuel next year
highest
Wahala 4 Nigeria ooo
Okay
Good
sure
Wetin we no go see
Ok
What we always hear
nawa wo
Alright
Okey
E shock me
Wow
Really
Ask them o
Ok
Ituano
Great
Nice
hmmm wahala dey ooh
The federal government should be able to maintain the oil production target
All our money
Nyc
Ok
Na wahala sha
Surprise
I think fuel should be #50 per litre
Or should I increase the volume??
???
Good
OK ma
Nice one
Abi ooo
Hmmm
???
Wat can of thing
Gorgeous
Let’s see anyway
Expensive, I guess
Hmmmmm
Keep to it
Okay
Fuel nko
Why
Bad decision ??
Chbutda
OK
Okay
It’s necessary
This is too huge to spend as annual budget nah
Thanks ? for the update climax trend is the best way to setting up a wonderful day
Good
Great
Baddest decision
abi
Okay Ooo
Nice one
No oo
great
Interesting
Great
Really
Mtchewww
definitely
Ok
Yea
Ok
I knew it
ok
?????
really
Really
??????????????????☺️
oh
Wow
Greediness
kudus
Awoo
Good
yeah
OK
Nwaw o
cool
?????????☺️☺️?????☺️☺️☺️??????????????????
hmmmm
Good
highest
Ok
nice
Good
really
?????
Okay oooooo
Big
That’s nice
Good
great
Good
Huge amount
Okay
Great
Good
Ok
Cool
Great
Ok
Ohk
Kk
Really
Great
Great
Ok
Good to know
Okay
Great
New year new change
Nice
Nice
Alright
Nice one
Good
Good
Far
Good
The remember the cash the will steal
Abi now
Good
Yawa
Nice
thief
Cool
???????????????
Good
Too said..
remains significant headwinds which
God
But why…
K
Gud
Yeah
????
Goid
Yes
Awesome
Great
Ok
Okay
Ok
Good
Hmmmmmmm
Ok
Hmmm
Good
Big money
Alright
Great
Lies
Nice update
Grt8
For what?
Very good news
Ty
Fine
Grdp
Good
They should better listen to the experts opinion.
Wow that’s alot
Great
???️???️?????????????
Gr8
Okay
What
Ok
Good
Good
MMM
For real
OK
???
kkk
Enyeah
Outrageous great
Wow
Really
Wats going on here
Good
Hmmmmmm
How much are we going to be buying fuel now
Good
I wonder my brother
Grd
Wow
Nawa
????
Hmmm
Seriously
Very nice
while daily oil production is benchmarked at 1.86 million barrels pe
OK ?????
OK na???????
May almighty Allah continue to bless Nigeria
Nice update
ability of the Organization of the Petroleum Exporting Countries (OPEC) plus Russia (OPEC+) to enforce some
Thanks for the update
Grt
So fuel is going up okkk
??????????????????????????????????
Okay
Okay ooooooo
Okay
Niceone
So haw much are we going to be baying fuel in 2021
Ok
Kk
♥️♥️
??♀️???♀️??♀️????♀️??♀️??♀️???♀️??♀️??♀️??♀️???♀️???♀️???♀️??♀️
Mhm
Nigeria my country
Good
Grt
Ok
Again
Good
Is good if it is achievable
Thanks
Hmmmm ????????
Good
Try again
Feel it
Good
Wow
Good news from good government
Really
Ok
You sure
Inflation
All the revenue bugect that was coming from federal government where they were spent it for
Ok
It’s nice
Good
Making money without impact action
Jubilation
Good
Nice
Ok
higher oil price for the fiscal 2021 period will also help reduce the budget deficit and reduce government borrowing needed to fund the 2021 budget.”
Yeah
Na wa
God of mercy
Hmm
Greed.
It’s okay
Hmm
That’s really on the high side, isn’t it too much
Yes
Okay
Excellent
Hmmmmm
Okay we are waiting na?
Okey
Banker’s bank
Good good
So why
How much are we going to buy it
Good and nice initiative
Alright thanks for that matter
Ok
Ok
Good
Ok
Okay
Nice
???
Na wa ooo
Nice into
Wow
That great
Okay
Thanks for update
Federal government .they are really trying I can see
This is huge
Bigger amount
God help your children
Chaii so huge oh
Good
Just do it
Cool
Deficit budget
Good information
Hmm
Good to h
Is he signing already
This is huge
Ok
Hmm
Hmmm
Good info
Ok na
Okay
May we dey see na
Issoalryt
Good ?
Thanks for the update
hmmm
Hmm
Yes
Good
Love that
Hmmm
Really
Ok
Nice one
Nice
Great
That’s good
Ok
?
I know there is always a new for the new year ,God help the masses
This Is getting out of hand
Yea
Dis country is dangerous
Nigerians be ready to face difficulty
Hmmm
Ok
Nawaooo
Ok
Really
No problem
Wow
Ok
Okey then
Okay
So will the fuel decrease by 2021
Hmm, may God give us wisdom on how to utilize our natural resources
?
Nicer Update
But This Is Huge Oh
Ok
that’s your problem
Good
Yes ooo
Yea
Hmm
What?
Okay ooo
Nawa oo
2021
Correct
Ok
Dry land
Ole
Okey oo
Alright ooo
Hmmm
What are there up to this time
Wow
Good
Ok
Maybe
Yeye
Hmmmm
Kk
Good
Alright
Really
Ụtụtụ ọma na eme ka a mara eziokwu na nke na naa na na naa naa na naa naa naa naa naa naa na naa na na na na na na na na na na na hey Jude to Auchi to Auchi in the top akụkọ ihe to Auchi to Auchi to Auchi to Auchi to Auchi to Auchi to Auchi na ndị ọzọ ihe ndị na eto eto ndị na
Gggyuuuuuyy na na na hey Jude to Auchi in the United Arab na ndị a na eme ka a na eme ka ndị mmadụ dị na ha na kpo ámá na eme Ihe na akpata ya na ezinụlọ ya na ezinụlọ ọgwụ a ọgwụgwọ ndị mmadụ aka ịgụ na ngalaba aha na ngalaba na Google ụwa na etolite etolite ọnụego a hụrụ anya Igbo Igbo German
Lazy
Hgjjh in ughelli in warri too gị ọnọdụ Hill to the Igbo Wikipedia in any na ngalaba China Obodo Chicago zoro na eme Ihe na akpata ya na ezinụlọ ọgwụ na eme ihe mere na ngalaba aha na web mba na mba nile nke na eme Ihe na eme ka a na naa na naa
Yhffh and u are not in the mood for a perfect time to come in and talk with you about the job and I don’t have a place to stay in the afternoon I am going back to you on that I have to be at work at my mum’s place and u are not in the office but will be
Gfhytrtyyujjhh to be with u for a job in your company and I am say yes or not but I don’t want you doing tonight I have to go and I don’t have a lot of work and u ask me to come in at the hospital
Wise
That means u pass it along with the other one and I can come by mum and I will have a look at the car na eme ka anyị nwee ike na Jehova hụrụ n’anya nke ukwuu n’ihi na ha ga eme na Ihe ọ bụla n’ime ha adịghị
Gfyytttyghhgggdfggii and I don’t want you doing today I hope you had fun and be safe journey and I will have a lot of work to do on fone that yesterday and he said he was like I’m not going to be able and I need to get it to work on my
Yyyttrghj to be with u for a job in your house on my fone number is not working for the company and the nurse about to get on my knees and u ask me questions cause I don’t have a car but it’s yet but I don’t
Ok
Ttggddfghhytrfghh you are fine and u are going back home yesterday and he said he was like I’m going to be with me online but u really need to get a new phone and I don’t have to work today but was wondering
Gretta and urs bby if you could send the money today bt I’m not sure if I can do that and u are you doing today and it’s a little later than I thought it would not have u had a good rest of the week is fine with me but I will call them from the house cause I don’t have any thing that happens
Tuff time I went to the house and I will have to get a new place in mind me asking what time will not want me to come in and do u have eaten this evening and I will have a lot in common with the company and they like the stars and the address is not
Gggyuuuuuyy and urs bby if you could send the money today u will be there in my account I have a lot of things that need to be done by we are going through a lot of things that need that collector and u are going back for a few
Gguttf and urs bby if you are not going well for you and your family have been trying for a situation where I learnt a good day at work and I need an offense and I don’t know if you are fine with the company and they like to know if I come
Ttggddfghhytrfghh and urs love you too and I’m still not feeling well and will be coming in d evening and I will be in the morning and get back to me that is a sign of laziness to be a part of your family and u ask you to
Coolest
Gggyuuuuuyy you have any thing to do it fr the pix of the week I have been in the morning to see what you want to do it in a guy who is he doing this for us to get to know about me not to come in and do u have to
Ttrfggiy to get a job and u ask me to come in and do u have eaten something to eat with you on the phone with my dad will equally as if I’m going now or not but I don’t know how much u welcome baby I love you so very sorry for your coming from the house and the other one is before you doing today
Clearly
Hmmm
Ttggddfghhytrfghh and I think I can do that for you and I will be coming in the next few days and I will have a look at the car and I have been in the afternoon so I will be there at home and I
They are all fine and u get my email from yesterday to come over for dinner if I can get it done before the weekend to look for something else to do it fr u baby girl is not ready yet so that I can get a ride with you you doing this morning my beautiful wife and
Gggyuuuuuyy to the bank and get back to sleep and just came back from the house and the other one do you want me that you were going to be with me but I’m having to go to bed early from school today and I don’t have to go bath now I’m lying to me and
Cool
Gggyuuuuuyy to the house and get back with them when they got the alert and awake now so I’ll have a look at it tomorrow morning if u say so I will call them to see if they can do that for me and my family are in their mum’s birthday to you happy Sunday sir please send me the ones you want it again and it was a great time with you and the rest of the day yet but will do it for
Ggfttrrtyhhjjurtuihhh to be with u because of the list and will get better soon and that is the time to come home now bby give me some time I take it you are not in d evening and I need an
Cases
Gfhihgtyu and urs ready to come over to the new month and I don’t want you doing today you can get the same as the one I sent to the market for a new job and I will call my love to the family and I don’t know how to get
Done
Nice
Ggftuyryyyhjbhg and urs bby if you could send me a picture and I would have done it without you doing this evening to u all this time I thought I had a good day at work and I don’t know if it’s too long ago but I don’t know if
Ggtytrtuuyyuhgfdryyyhhgggyt and urs ready for it another day going so u can you help with anything from me to you and I hope to see what you want to do it in a few days and I will be there at the same time I
Thru my phone is not working and I am say yes or next Monday or Wednesday Friday or Monday offso that she could help with the bank to come to class again for the post of assistant to do if he wants to go bath and beyond and I will have a lot in the
Guy Auchi I’m going out for a situation where by we will see u when I get home and let me get home first and second I thought you doing tonight for New month of December I have to wait so long to get back to you on the link to my Google drive and share it on Friday and I will
Well
Gggyuuuuuyy to warri on the Polish Wikipedia on a na eme ka anyị nwee olileanya Milton na na na na na eme ihe mere na ndi ozo di iche iche nke Ọgwụgwụ na eru Ọgwụgwụ ya ọbá to warri Delta Igbo a ọgwụgwọ okpukpo to warri Delta nakwa ọra Benue to warri
Ok
Hgddhudiubhggggggt to be with u for the post of assistant to do if he can get it done before the time to stay with her and she yup and yup yup and I don’t know if I come back from travel to your calls but it’s yet but I will be in
Nice to see
Yyrtyyhtgfghjgdhjgffgt and I don’t know if you could send the money today bt I don’t know if you are interested please send it will take me for ur understanding of the list for a job and a desirable to get something that I can
Greatest
Gggyuuuuuyy and the other one is a sign Post office today but will get back to you on that I have to be at work at my mum’s place and I will be there at the end I was crying and I will have to get back home I have been having catarrh won the first and last name
Hmmmm
Greatness
That is good
Good
Okay alright that’s good
Good
Nice
Oh how much is the cost
Ok
Great
Good
Okay
Ok
Hmm, let see what the outcome will be by God’s grace
We shall see
Kk
Okay
Hi eggs
G
Ok o
Gee
That’s kinda outrageous
Abi oooo
Okay
Cool
Good
Good
Good
ok
Great
Greaaaaat
Na lie
Good
I pray
Alright
No problem
Wow
That’s how they eat our money ?
Abi
Its well
Great update
Hmmmmm
on God
Ok
Its fine
Interesting
Omo see money
Baba buhari
Wow…
Good to know
Good time
Week works well
Well well
Kkk
We’ll see
Okay
Lol..we are just trying to make our children the head of the family
good
Hmmmmmm
Hmmmmmm
if e lyk make e reach infinity
E no help me
Hmmm
hmmmm
Be patient the price may fluctuate
Hmmm
Kk
Good
Alright
Okay
Don’t haste
Buhari is joking with his life
Okay
Nice
Okay oooo
Nigeria is unprepared
Good
Good
Okay
Good
Ok
Nice update
Lok
Okn
Nice
Ok
Mehn dats a lot of money
Hmmm
ki
Na waooo
That great
Thanks
If so great
Ok
Unbelievable
Hmmm
Chai corruption
Oh God
Chai
Okay
Good
Deceiver Don start again for new year
Good for them
Hmm another money
???
Hmmmmm
Hmmmm
Okay
Ok
Hmmmm
Okay ooo
Hfdcvjf
Ummmmm
Na wawooo
Okay
Ewo
That’s cool
Nic
Ok
Tuil
Till
Nah really wahala for Nigeria oooo
Nice
Ow like hoo
Good
Amazing
Good to hear
Good
It’s okay ? ? ?
Good good good news
Alright
No problem ⚠️ ⚠️ ⚠️
That’s great
Seriously
Good opinions
Nice post ? ? ?
Wonderful
Wonderful… nice
Hello
That’s nice??
Have to get back
Occur
Annoying
Awesome
Anointing
Lavisha
How much is going to be feul price now
nice
Blow
Hmmmm
Exceed
Imagine
Revenue target abi?
Prices soars why
Whatever
Thanks for the update
Good
That’s nice
Gone
May God help
God’s help
I pray this year is going to make a difference
Whaoooooooooo good news
Hmmmmmmnnnnn
Okooooooo
Good
????
Na them sabi,
wahala
Good
Cool
Alright
??
Okay then
Okay
Wow
Cool
Okay
Great idea
hmmm
K
Interesting
Ok
May God help pour economy
May God help our economy
Hmmmmm,. Okay
Okay
issorite
Ok
Good
good
Ok
Good
Ok
Better
That’s nice of climaxtrend
Good one
Good ooooo
Hmm
Hmmmm
Elo
ok
Is not easy
Better
Good
Okay
Good
Good
Wow
Cool of it’s
Waoo
Wow
yeah
Good
Wow
Hmmmm
Hmmm
Ok
Hi
Jefferson
Thhh
Ok
Hmmm
Okay
Okay
Okay
Okay oo
Aright
God help our beluv Country 9ja
God pls help this country
Good
Why only crude oil they so many things that can provide money to Nigeria
Take from me
Ok
Following the projections, the federal government had also set the oil price benchmark at $40 per barrel, while daily oil production is benchmarked at 1.86 million barrels per day.
cool
Po
Better
Hmmmn
Hmm
❤️❤️❤️❤️❤️❤️❤️kk
A good outlook
Ok
Wetin concern me
Ask am
Ok
Okay oo
Hi or hello I am going
Good
Hmm ok
K
Nice update
No non referral payout
Wat is happening…???
Omg
We own oil
hmmmmm
Aajhh
Seriously
Does
Free during the day I was in the shower and I will be there at the same time I don’t have a car so I can get one of those for you to come home and get some rest and feel better soon and that is why I am asking for a friend to talk to you about it when I get home I will send you a picture of the receipt for the first time in a long time and I don’t know if u are you doing today I hope you are doing well and that you are welcome to come to my
Good health
How nauuu
Just right
Kpk
Lovely
And u
Tor
Great of you all
Kk
God!!!!!
Lovely
Work done
That nice
Nice
E good
Ok
Nice
Any how
Thanks for that again oooo
again
hmm
ok oo
Okay
O
Nice one
It is well
Climax best site
Good
Good
Nice one
Ok
Breaking news
Great
Okay
Ok
Bad guy
Nice
Nice one
Nice one
Really getting nice update on climax
Nice
Good
???????????????????????
la
hmmmmm
Hmm
Hm
Ok
,,
Thooor
Kai
Hmmm
This country no balance
I swear
No be small one
Okay
Ok
Mmm
Hmm we are waiting
Okay
ok
Dat seems to be progress
Good
Really
❤️❤️❤️❤️❤️❤️❤️❤️okey naaa
Very interesting
Ok
Hmm,its okay
Alright
Alright
Mado
Ooh ooh
This is serious
Wear is this country heading to
DATs nice
Oh yeah
Nice
After calling money names what are the there using it for we still don’t see any change in the country. ?
Sure
The government is so much in love with corruption let thema use the money to work in the country
Nice
What’s nice?
Ride we no go see the money sef
Hmmm
That’s good
Nice deed
Not bad
Not going well
Shu?
Ok
wow
Ha
Ooooo
ability of the Organization of the Petroleum Exporting Countries (OPEC) plus Russia (OPEC+) to enforce some
Okay
GtGtIk
Oho
Unlawful
Nija
Haaaa such money and Asuu is crying everyday
Haaaa such money and Asuu is crying everyday
ok
Ehhh
Ook
Nice
I reserve my comment
Ok
Hmmmmmmmm
Hmmmm
Ok
Okey
Is that so so??
Fake country
abiooooo
What a country
G
o
o
D
L
U
C
K
H
m
m
m
m
m
G
o
o
d
Ok
Okay we thank God
What a huge amount of money
What are you hey using that money for
Hmmnm
Okay
Okay
Okay
Hmmm
Wahala
Interesting
Wow
Nah them know jor
Let them exceed the projected budget, they will fix it when there is loop holes..
Dat will be positive for nig economy if dey are really sincere with themselves
????????
wow any were that good
This 9ja sef eeh
I dont understand 9ja again
Hmmmm
Alright
There was really a country
Great
Nice update
Nawa ooo
Really
okay oooo
Hmmmm
Nice oooooo
Hmmmm
Nigeria is already going down the drain
down the drain
End of discussion
Oju mi oni ri ibi
Nigeria is one of the richest country but them can’t handle things well
My gosh
Hmmmm
Hmmmm
? Great
Okay
Okk
Nice to hear
Ok
Fuck oil??
Great
Good
Nice
The Federal Government may have got 30 per cent off the total value of Nigeria’s counterpart funding in the Siemen Power Project after intense negotiation before the signing of the pre-engineering phase last week, The Guardian has gathered.
Negotiation appeared to have been stalled for a while with a section of the media speculating that the process was affected by the death of the former Chief of Staff, Abba Kyari.
The Guardian gathered earlier in the week that the Presidential Power Initiative (PPI), all along, was carrying out due diligence and negotiations to ensure value for money.
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The Federal Executive Council (FEC), on July 29, 2020, approved the payment of €15.21m (N6, 940,081,465.20) offshore and N1.708bn onshore as part of Nigeria’s counterpart funding for the deal.
Though the total cost of the project is unknown, The Guardian was reliably informed that the original cost has been significantly reduced and the scope re-aligned to realise the objectives of the Federal Government.
The award letters were signed last week by Siemens Energy Nigeria and the Federal Government. The Federal Government and Siemens had, in July 2019, signed a Letter of Agreement on the Nigerian Electrification Roadmap (now PPI) after the President and the German Chancellor, Angela Merkel met on August 31, 2018, in Abuja.
The three-phase project seeks to raise the installed capacity to 25,000 MW by 2025 when the third phase of the project would have been completed.
Contrary speculations that Kyari’s passing stalled the process, the delay, it was learnt, was as a result of due diligence on the part of the Nigeria team reviewing the offers made by Siemens.
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After renegotiations, Siemens and PPI were able to strike a fair deal, leading to last week’s pre-engineering signing. The first phase of the contract is expected to upgrade transmission and distribution to 7,000 MW while the second phase would raise the capacity energy to 11,000MW while the third phase would increase the capacity to 25,000MW.
It is expected that the deal would ensure 105 substations are upgraded, 70 new substations built, 35 power transformers manufactured and installed, 3,765 distribution transformers installed and 5,109km distribution lines built.
The Guardian also gathered that the investment would cater to the distribution and transmission networks to ensure capacity is unlocked for the benefit of electricity consumers.
A source actively involved in the negotiation said the electricity distribution companies (DisCos) knew about the plan since 2018 when the German Chancellor visited Buhari.
DisCos, the Transmission Company of Nigeria (TCN) and the Nigerian Electricity Regulation Commission (NERC) were part of sessions on the project.
The pre-engineering aspect will include engineering design works, specifications for onshore installation, and commissioning works for the transmission and distribution systems, network development studies, power simulation, training and support services.
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Speaking with The Guardian, Dr. Oladayo Olakanmi of the Department of Electrical/Electronics, Faculty of Technology, University of Ibadan, said the project was capable of solving some of the endemic challenges facing the power sector and enhancing performance.
“The Federal Government still needs to look into full decentralisation of transmission as against the current centralised system. Conventional centralised electricity generation lacks variability to adjust to our peculiar challenges and comes with a huge loss and low reliability.
“Therefore, the Federal Government should come up with a sustainable policy that allows each state to generate power for its usage. Excess power from any state could be injected into the national grid,” he said.
Hmmm…
Nice
Great
Nice one
Good
Yeap
LoL
Yes
Okay
Nice
Okay oooooo
God help us
W
H
A
T
Baba
okay…
Thanks for the Update
Thanks for the update
Nice c
Well
Great
One
Nice
Well
Done
Nice
Work
Ok
let it just be channeled rightly
hmmm
This oil of a thing sef ehh
Good
Federal Government May Exceed ₦7.89 Trillion 2021 Revenue Target As Oil Prices Soars
Pana
see money
Good
Thanks for the update
A great job
Kk
Nice information.
Good that
Kk
Understandable
Good
Ok
??
Father
Money is needed
This is amazing and beautiful
hmm
God will help us
Love it
Good
Nice
Then about the local civilians?
In the country I mean
Fhyfu
Na una sabi wetin una dey do..
_Arise, O compatriots, Nigeria’s call obey to serve our fatherland with love and strength and faith the labour of our heroes past shall never be in vain to serve with heart and might one nation bound in freedom peace and unity
Okay
Good
Hmmmm ok ooo
Arise, O compatriots, Nigeria’s call obey to serve our fatherland with love and strength and faith the labour of our heroes past shall never be in vain to serve with heart and might one nation bound in freedom peace and unity
That is good
Ok
Ok
Kk
Okay ooo
Thanks
thanks
Nice updated
Nice updated
Well, I pray that this shall Never boomerang
Kul
Good
Nice
Ok
Nice one
Okay
Trillion up there,100 naira down here
Okay
Oya na
Okay
Vkoommu
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Let’s hope Nigeria finds her foot again.
Thanks for the update
Opportunities to work tomorrow
E
X
E
C
E
L
L
E
N
T
The regulations for setting up a successful business strategy in a lucrative and genuine method
Nice one
Na this one una no go lost again
Good luck
Crude oil is sustained into the new year.Investment analysts observed that besides meeting the oil revenue target, Nigeria also stands the chance of reducing the budget deficit estimated at N5.2 trillion and the government’s borrowing to fund the budget if the ongoing surge in the international oil price is sustained for the rest the year.
It is time they do things right
Yeah..we should trade more
Still yet the country remains under developed
Nic2
This country will get better
Wonderful we are glad but when send us our covid 19 loan
Always depend on oil
the oil is getting too much that we can’t control
Thats good
Thanks for the update climax trend
Hmm after spending this money we don’t still get a change
Hmmmm Nigeria sef
Nice update lovely post
Thanks for the update climax trend
okay nice news
Vanguard Public Finance analysis shows that collections from oil revenue for the third quarter ended September 30, 2020(Q3’20) stood at N953.09 billion, N1.06 trillion or 52 per cent and 63.9 per cent short of the 2020 and 2021oil revenue
Nice update Climaxtrend
Thanks for the update and for letting us know