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FG, Lagos State collaborate to address declining infrastructure in Festac Town

The Federal Government and Lagos State Government have resolved to collaborate to address the degeneration of infrastructure in Festac Town, a federal housing estate situated in Amuwo-Odofin area of the State.

They had promised to address the challenge of excessive property development and lack of facility in the housing estate.

This resolution was the outcome of a meeting between the Lagos State Governor, Babajide Sanwo-Olu and the Managing Director of the Federal Housing Authority (FHA), Senator Gbenga Ashafa, on Wednesday.

FIND YOUR NEXT HOME IN FESTAC

This signals an end to the lingering disagreement between Lagos State and the Federal Government over the matter.

Ashafa, who led top officials of FHA including its Executive Director for Business Development, Hon. Abdulmumin Jibrin, on the courtesy visit to the governor, presented 4 partnership requests to the Lagos State Government, which include knowledge sharing and technology transfer, cooperation on infrastructure delivery, and quick resolution of development crisis in Festac Town.

Sanwo-Olu described the development crisis in Festac Town as unpleasant, pointing out that the population growth and influx of people led to the degeneration of the neighbourhood. He also said the failure of oversight on activities of property developers in Festac Town distorted the original master plan of the area.

He said, “Festac Town as it is today is not what it looked like from the 1970s to 1990s, given the degeneration of infrastructure and the unpleasant development observed in the community. The original master plan did not consider population growth, which reflected in the calibre of allottees that got the property then. As a result of the lack of monitoring and enforcement, people took advantage of this weakness to build indiscriminately on every available space.

“I think we can still correct this irregularity and regenerate the entire area for healthy living and business, now that the Federal Housing Authority is headed by a highly knowledgeable indigene of Lagos. Once the Federal Government is ready, Lagos State will cooperate fully and work through our Ministry of Physical Planning and Urban Development on the agreed plan. We are ready to give a waiver on statutory issues that may aid the progress of this move. Lagos is not the owner of the estate but we have a sense of duty to prevent the depreciation of the asset on that corridor.

The Governor also conceded to FHA’s request to collaborate in the area of technology transfer, pledging to work with the federal housing agency to raise its capability by creating an electronic solution that would further ease allocation of property, land administration and approval of survey plan.

Sanwo-Olu expressed his appreciation to President Muhammadu Buhari and Minister for Works and Housing, Mr Babatunde Fashola, SAN, for the choice of Sen. Ashafa as the Managing Director of the federal housing agency, noting that the FHA boss’s tenure as Executive Secretary on Land Matters in Lagos boosted the value of land and property in the State.

FLATS AND APARTMENTS IN FESTAC

Ashafa, on his part, said FHA was ready to resolve all lingering crises delaying the re-modelling and regeneration of Festac Town, expressing confidence that the mid-way approach adopted by the agency would yield a positive outcome for both the Government and residents of the estate.

He described his meeting with the Governor as productive and fruitful, pledging to take the discussion further. He also acknowledged that all the 4 issues they presented were taken in by the Governor positively.

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Big players in Paints and Coatings industry suffer 52% profit loss in the first 6 months of 2020

The economic challenges triggered by the COVID-19 pandemic and accompanying issues from foreign exchange illiquidity coupled with the existing structural and regulatory imbalances in the economy constrained the operations of the big players in the paints and coatings industry in the first half of the year.

The knock-on effect of the COVID-19 induced lockdown on the global and domestic value chain like other sectors in the economy took a huge toll on the activities of the producers in the paint and coating industry, as the pandemic disrupted their operations and also their trade segments, and this in extension led to a fall in demand, sales volume, revenue and underlying profits of the players.

The paints and coatings industry is highly fragmented, with small producers accounting for more than half of the total revenues generated in the paints and coatings industry. The big players who have elaborate dominance in the industry include CAP plc, Berger Paints Nigeria Plc, Portland Paints and Products Nigeria Plc and Meyer Plc.

According to the half-year financial results of CAP plcBerger Paints Nigeria PlcPortland Paints and Products Nigeria Plc and Meyer Plc, the sales of these companies were severely affected by the pandemic with the cumulative revenues of these companies declining by 12.8% from N7.4 billion to N6.5 billion owing to disruption to the trade segment and the operations of the companies.

On the flip side, Berger paints was the only company that reported a growth in revenue in the first half of this year, with the company’s revenue growing by 16.77%. While the revenue of CAP plc, Portland paint and Meyer declined markedly by 10.71%, 43.27% and 34.82% from N3.91 billion, N1.36 billion and N604 million reported in H1 2019 to N3.5 billion, N771 million and N393 million respectively in the first 6 months of 2020.

Extensively, the raw materials such as resins, pigments and additives used in the industry have to be imported and these materials are subjected to import levies, exchange rate volatility and haulage costs.

Given the current business reality of the paints and coatings industry which is coloured by foreign exchange illiquidity as well as logistics and regulatory rigidities in importing raw materials, the margins of these companies were affected directly, as profitability was suppressed by the hike in input prices.

Although Berger paints reported a 16.77% growth in revenue, the cost impact of the raw materials it used in its operation along with the increase in administrative expenses led to the fall in profit after tax by approx. 72%, with the company spending N812 million on raw materials from N664 million last year it expended last year.

In like manners, the bottom line of Chemical Allied Products Plc and Portland paints Nigeria Plc fell by 30% and 217% respectively. While Meyer’s loss rose by 105% to post a N60.7 million loss from N29.5 million last year.

Survival strategy deployed

With revenue constrained, it is noteworthy that in the quest to make more sales, CAP Plc and Berger paints relaxed their credit policies, this development made trade and other receivables increase by 121% and 30% respectively, this indicates that the top producers of paints relaxed their credit policies in a bid to generate more sales with their buyers cash strapped.

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Electricity Tariff Increase, Suspended for 2 Weeks

TThe Federal Government and the Nigerian Labour Unions have agreed to suspend the electricity tariff increase for a period of two weeks. This was part of the agreement reached between Labour and the Government as they deliberated to avert a nationwide strike that would have grounded an already deteriorating economy.

While the strike was over two major issues, an increase in electricity charges and fuel price respectively, the decision to call off the strike was based on the suspension of the electricity bills. The following terms of reference underpinned the agreement between Labour and the Government.

FG & LABOUR reach agreement at 2:53am. Deregulation to stay as Govt rolls out palliatives for labour (details in 2 weeks); Electricity tariffs suspended by Govt for 2 weeks with a joint Committee headed by @fkeyamo to examine the justification for the new policy. Strike suspended pic.twitter.com/9tOTlJ9o1l

— Festus Keyamo, SAN (@fkeyamo) September 28, 2020

Terms of reference for suspension of electricity increase for 2 weeks.

Terms of reference “The Terms of Reference (ToR) are as follows: To examine the justification for the new policy on cost-reflective Electricity Tariff adjustments.”

  • Both parties are to examine the justification for the new policy on cost-reflective tariff adjustment
  • To look at the different Electricity Distribution Company (DISCOs) and their different electricity tariff vis-à-vis NERC order and mandate.
  • Examine and advise government on the issues that have hindered the deployment of the six million meters.
  • To look into the NERC Act under review with a view to expanding its representation to include organized labour.
  • The Technical sub-committee is to submit its report within two weeks.
  • During the two weeks, the DISCOs shall suspend the application of the cost-reflective electricity tariff adjustments. “The meeting also resolved that the following issues of concern to Labour should be treated as stand-alone items:
  • The 40% stake of government in the DISCO and the stake of workers to be reflected in the composition of the DISCOs Boards.
  • An all-inclusive and independent review of the power sector operations as provided in the privatization MOU to be undertaken before the end of the year 2020, with Labour represented.
  • That going forward, the moribund National Labour Advisory Council, NLAC, be inaugurated before the end of the year 2020 to institutionalize the process of tripartism and socio dialogue on socio-economic and major labour matters to forestall crisis.

What this means: The decision reached between the government and labour means the service reflective tariff regime which started on September 1, 2020, is effectively suspended. Customers are therefore no longer required to pay the service reflective tariffs and will revert to the previous MYTO tariffs of 2015.

  • By looking at the “different Electricity Distribution Company (DISCOs) and their different electricity tariff vis-à-vis NERC order and mandate” it appears labour might be looking to recalibrating the tariffs for some Discos.
  • According to documents on the tariff order published by the NERC, some Discos have tariffs for residential customers that are as high as N62/kWh while it’s just under N54 for others.
  • Labour could also get involved in determining the veracity of the tariff bands that determines which customers pay what as electricity tariffs.

Source: Nairametrics

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Customers to pay for metering through cost of tariff – NERC

Commissioner for the Nigerian Electricity Regulatory Commission (NERC), Mr. Nathan Rogers Shatti, has said that Nigerian electricity customers won’t have to pay for meters in the new guidelines, as it would be covered through tariff costs, and customers who had paid for their own meters would be compensated.

This was disclosed by the electricity regulator in a virtual session with customers and stakeholders of Nigerian electricity on Wednesday evening.

The Commissioner used the event to educate customers on the new service-based tariff and other complaints regarding their meters. “Service based tariff is important,” he said. “It would be applicable for those who are getting the services; let them pay for it.”

“There would be a new mechanism for people who used their money to buy their own meters. There have been delays in the implementation; all those who paid for their own meters will be compensated.”

He added that in the future, the cost of paying for the meters would be added to the new service costs, saying, “Metering, going forward won’t be paid for, but through the costs of tariff.

He also explained how customers who had paid for their own meters would be compensated. “Their costs would be computed and they would be compensated overtime,” he said.

Nairametrics reported last month that President Muhammadu Buhari had approved the much-anticipated electricity tariff increase effective from September 1st, 2020. The Federal Government also said that only customers with a guaranteed minimum of 12 hours of electricity could have their tariffs adjusted under the new electricity tariff arrangement

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CBN approves N200 Billion Housing Loan for 300,000 Households at 5% Per Annum

The Central Bank of Nigeria (CBN) has approved the sum of N200 billion as mortgage finance facility to the Family Homes Fund Limited (FHFL) and targeted at low income earners.

According to a circular, which was issued by the CBN and seen by Nairametrics, this financing initiative is to be implemented in collaboration with the Family Homes Fund Limited as the lead developer, as it is introduced to support the Federal Government’s Economic Sustainability programme.

This fund is to fast track the construction of 300,000 homes in the 36 states of the federation and the Federal Capital Territory and to create up to 1.5 million jobs in 5 years.

In addition to the 1.5 million direct construction sector jobs particularly young people on a low income, the programme also has the potential to create further 1 million jobs through its supply chain.

The CBN in the circular stated, ‘’The programme will house up to 900,000 children and adults (at an average of 3 persons/home) on a low income with direct impact on health, education and economic outcomes. Most of these would currently live in informal settlements with shared facilities in unsanitary environments. Towards targeting people on low-income level across the country.’’

(READ MORE:has approved the sum of N200 billion as mortgage finance facility to the Family Homes Fund Limited (FHFL) and targeted at low income earners.

On boosting local manufacturing, the apex bank stated, ‘’The programme is designed to utilize at least 90% locally manufacturing inputs and as a result conserve foreign exchange.

“In that regard the programme will deliberately aim to revitalize local manufacture of construction materials including doors and windows, ironmongery, sanitary fittings, concrete products, tiles, glass, electrical fittings/fixtures and bricks etc. for example, it is estimated that the programme will require up to 1.7 m doors, 7m door hinges and locks etc.’’

The funds, which would be released to the Family Home Funds (FHF) by CBN on a project basis is subject to the cumulative maximum limit of N200 billion. The facility type which would be a term loan is to enable FHF finance the construction of social housing units for low-income earners and is for a 3-year tenor from the date of disbursement.

The facility, which is expected to be repaid in not more than 3 instalments within the tenor of the facility, has an interest rate of not more than 5% per annum.

Soure: Nairametrics

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