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Fraud:Nigerian Govt uncovers £2.2million PHCN Fund stashed in UK bank

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Says company lacks money to fund scheme
By Joseph BAMIDELE

President Jonathan

Abuja – AN investigative panel set up by the Federal Government of Nigeria to audit existing financial activities around the controversial Power Holding Company of Nigeria (PHCN) Superannuation Pension Fund has uncovered about £2,204,814.18 million company’s total pension sum stashed away in a bank in the United Kingdom (UK).

The money which has been lodged in the UK’s Barclays Bank for close to 21 years was said to have accumulated from pension deposits for expatriate workers of the utility by its officials long before it metamorphosed into PHCN.
Chairman of the eight-man government audit panel on PHCN pension, Mr. Joseph Ajiboye who is also a former Auditor General of the Federation (AuGF), said however that the panel could not ascertain if officials of PHCN had continued to remit pension and gratuity deductions to the said foreign account considering that the last expatriate pensioner of the utility is reported to be late.
Presenting the report of the investigation on Monday to the Minister of State for Power, Mr. Darius Ishaku in Abuja, Ajiboye explained that its consideration of various financial audit on activities of the in-house pension scheme of the company showed that its failure to fund the scheme was based on an excuse that it has perpetually operated at commercial loss especially within these periods.
He noted that financial audits of the scheme from 1990 to 2010 which it studied in a bid to ascertain transactional trends in the account showed that from 1990 to 1999, a total of N1, 787,919 billion was paid out as pension and gratuities to workers while N51, 279,940,138 was paid out in the years 2000 to 2010.
The panel’s report also indicates that PHCN has in the past 21 years failed to fund its in-house pension scheme, thus, putting the future of its retiring workers in jeopardy. Presently, the report disclosed, the electricity behemoth has no money to fund the pension scheme.
It also discovered that some of PHCN assets which were assigned to fund the pension scheme had been purportedly sold off.
According to Ajiboye, the financial documents studied by the committee showed that a total of N53,67,859,138 was paid out as pensions and gratuities to PHCN workers within these periods, adding that an actuarial sum of N107 billion was equally set aside by the utility as contingent sum.
The immediate past Minister of Power, Prof. Barth Nnaji set up the panel with a 30-days lifespan to investigate the status of pension in the power sector vis-à-vis the pension laws, identify officers involved in any act of misconduct in the management of pension as well as review pension matters in the Agari committee report.
This was following allegations of illegal operation of and deductions from an in-house pension scheme that runs contrary to extant pension laws in the country,
The panel was also expected to recommend measures to guard against occurrence of similar incidents in the future as well as sanctions against culprits.
The report said PHCN has for years operated an in-house defined pension scheme codenamed “the superannuation pension fund”, with only the management and leaders of its trade unions as its trustees; this arrangement however runs contrary to provisions in the Pension Reform Act (PRA) 2004 which came into operation in 2007, and has however been frowned at the Federal Government.
According to Ajiboye, “When we looked at all the financial statements that had been audited as far back as 1990, we found out that between 1990 and 1999, the total of pension and gratuity paid under the superannuation fund was N1,787,919, both gratuity and pension were less than N2 billion paid and it is understandable because of the low level of salaries and wages paid in the 90’s.
“From 2000 to 2010, the total pension and gratuity paid was N51, 279,940,138 and so for the 21 years running, the total of gratuity and pension paid under the superannuation fund to all pensioners was N53, 67, 859,138, that is all that has been paid since 2010 and these accounts had been audited and confirmed as real and applicable figures.”
He further noted that, “We had an issue of N107 billion which was an actuarial valuation and was a contingent liability; it is not as if any money was paid out of that.
“We also spoke with the National Union of Pensioners who gave us a historical background of the scheme which they traced to the ECN and the Niger Dam Authority and how the issue of 25 percent arose; we have a paper from them that shows that there was no deduction of the percentage from the salaries of any worker up till April this year, they also showed evidence that when the ECN and Niger Dam were collapsed into one, they all decided to maintain one scheme but it was not contributory.
The panel further observed that “certain properties were given to the superannuation fund to bring income in addition to whatever PHCN would contribute but unfortunately we found out that one of the properties in Kado Abuja was purportedly sold and we didn’t find out if there was any money remitted from such sale.
“Another one is a storey building in Lagos that was ceded to the Federal Inland Revenue Services by PHCN because it was owing taxes that it could not pay. The recurrent expenditure of PHCN is not provided by the government but its capital expenditure.
“We found out that a total of £2,204,814.18 million of PHCN pension money is still in London laying idle as accumulated monies from pension deposits for expatriate workers of the former ECN and Niger Dam Authority; we understand that there have been efforts to retrieve the money that is lying idle in the Barclays Bank,” Ajiboye stated.
The panel however recommended amongst other things that a full audit of accounts of PHCN successor companies be carried out to ascertain their levels of accountability with funds given to them by the Market Operator.
Ishaku in his remarks, expressed gratitude to the panel which he noted had done a thorough job that will quicken outstanding negotiations with PHCN unions on the privatisation exercise.
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Power

Nigeria To Face Increase In Electricity Tariffs From July

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According to reports, Nigeria’s population may face more challenging times ahead as electricity tariffs are projected to increase by over 40 percent in the near future.

 

This rise in tariffs could ultimately result in the elimination of all energy subsidies in the country.

 

Currently, the electricity sector relies on a monthly subsidy of approximately N50 billion, stemming from a shortfall in revenue.

 

The tariff hike, scheduled to take effect from July 1, will pose another significant test for President Bola Ahmed Tinubu’s administration and its ongoing market reforms.

 

The government has already taken steps to remove subsidies on Premium Motor Spirit (PMS) and implemented a floating exchange rate for the national currency.

 

These decisions have added complexity to the price-setting process of the Nigerian Electricity Regulatory Commission (NERC) and its 2022 Multi-Year Tariff Order (MYTO).

 

Despite power sector players failing to meet the target of supplying a minimum of 5,000 megawatts, even after signing contracts with the Nigerian Electricity Regulatory Commission (NERC), the current Service Based Tariff (SBT) is based on an exchange rate of N441/$ and an inflation rate of 16.97 percent.

 

According to NERC’s directives in 2015, the average tariff for distribution companies (DisCos) and different categories of end-users was N25 per kilowatt, as per Order 198/2020, which came into effect on September 1, 2020.

 

However, in the MYTO for 2022, the average tariff increased to N60 per kilowatt across all customer categories, and in the most recent update, it stands at N64 per kilowatt.

 

The determination of the 2015 tariff relied on a foreign exchange rate of N198.97/$, which increased to N383.80/$ in 2020 and further to N441.78/$ in 2022. In terms of inflation, the 2015 MYTO utilized an 8.3 percent rate, which rose to 12 percent in 2020 and reached 16.97 percent in 2022.

 

Currently, the inflation rate stands at 22.41 percent, and experts predict it could reach 30 percent by the end of June, considering the floating of the naira and the removal of subsidies on Premium Motor Spirit (PMS).

 

The tariff determination process takes into account various factors, including the significant metering gap of over seven million, gas prices, losses within the system, and the actual generation capacity. These elements play a role in determining the final tariff.

 

As anticipated, NERC had projected that the tariff for July 2023 would eliminate subsidies and introduce increases to the previously frozen tariff bands D and E.

 

These adjustments were intended to raise the bands from N54.59/kilowatt to N62.16 for band D and from N48.37/kilowatt to N61.16 on average. Moreover, the average increase across all bands was expected to reach N67/kilowatt.

 

However, due to the ongoing floating of the naira and the significant inflationary pressures, it is now projected that the new average tariff will need to be approximately N88/kilowatt for the power sector to recover its costs.

 

According to energy lawyer Madaki Ameh, the continuous and frequent increases in power tariffs are akin to a form of blackmail against electricity consumers.

 

Amen said “Indexing the cost of electricity on the dollar is a huge mistake because most of the inputs for electricity supply are local. The DisCos are also holding Nigerians to ransom by failing to increase the supply base, thereby spreading the tariffs across a broader spectrum of consumers to reduce the unit cost of electricity.”

 

He insisted that as long as there remain many unmetered consumers and many others not connected to the grid at all, the few consumers on the grid would continue to be subjected to unjust tariffs, which are not reflective of the quality of service delivered.

 

Ameh hoped that the signing into law of the new Electricity Act would mark “the beginning of light at the end of the long tunnel of inefficient and epileptic power supply in Nigeria.”

 

Segun Ajibola, the former President of the Chartered Institute of Bankers of Nigeria (CIBN) and a professor of Economics at Babcock University, highlighted that there remains a gap between the cost of electricity and the value it provides in exchange.

 

“Nigerians are still struggling to keep pace with the cost of energy for business and household use. If the electricity tariff goes up as envisaged, the question remains if there will be value for the quantum of electricity so paid for.

 

“The truth remains that if electricity supply is constant, of the right quantity and quality, the envisaged upward review in the tariff will be gladly absorbed by the populace,” he said.

 

Lanre Elatuyi, an Electricity Market Analyst, expressed that the recently implemented tariff rate would have significant implications. He emphasized that the devaluation of the Nigerian currency poses a major challenge for companies with dollar-denominated loans to repay.

 

He said “They will need more naira today to buy a dollar. They need to manage their exposure to foreign exchange risk. Even operators of hydro plants pay their concession fees in dollars. So, wholesale electricity price will be adjusted upward and this will get to the end users’ tariffs too.”

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Power

Buhari’s Gov, State Governors Secretly Sold 5 Power Plants – Shehu Sani

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Senator Shehu Sani, a prominent Nigerian lawmaker has accused President Muhammadu Buhari’s government and state governors of secretly selling five power generating plants without disclosing the utilization of the funds received.

 

He disclosed this in his Twitter handle on Monday.

 

Senator Sani, known for his outspoken nature and activism expresses his concerns over the alleged undisclosed sale of the power plants.

 

He claimed that the government, in collaboration with state governors, had carried out the transactions without informing the Nigerian public about the purpose of the funds acquired from the sale.

 

The post reads “Buhari’s Government in collaboration with the State Governors quietly sold the five power generating plants without telling the country what the money was used for.

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Power

Nigeria’s VP Inaugurates 240MW Afam 3 Fast Power Project

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The Vice President of Nigeria, Prof. Yemi Osinbajo, has inaugurated the Afam 3 Fast Power 240-megawatt turbine project in Rivers State.

 

The project, which is a subsidiary of the Transcorp Group located in Oyigbo, on the outskirts of Port Harcourt in the state, was unveiled during a ceremony that took place on Tuesday.

 

The event, which was attended by several dignitaries, including the Chairman of Transcorp Group, Tony Elumelu, and other top officials, saw the Vice President arriving at the venue in a chopper at exactly 11:35 am.

 

Upon his arrival, he was escorted into the premises where he officially inaugurated the project.

 

During his speech at the event, he disclosed that the acquisition of the project was approved by the National Council on Privatisation (NCP) and the acquisition cost was ₦105.3 trillion.

 

Osinbajo further emphasized that the successful completion of the project is a significant breakthrough in Nigeria’s power sector.

 

In his address, Osinbajo said, “In 2020, electricity subsidies reached N584 billion, but service-based tariffs have led to a doubling of collection in the Nigeria Electricity Supply Industry from N40 billion in 2020 to N80 billion in the first quarter of 2023.

 

“If this trajectory continues, the Nigeria Electricity Supply Industry will be able to pay for itself. Our administration has also created programs for off-grid for electrification. Rural Electrification Agency now has the capacity to provide electricity supply on a first-class basis.

 

“We are on track to electrify all Nigerians in the next decade. However, we will not make progress if our gas supply does not improve. The gas supply challenges are hampering improvements.”

 

He further lauded General Electric, the National Council on Privatization (NCP), and the host communities for their contribution to the completion of the Afam 3 Fast Power 240-megawatt turbine project in Rivers State.

 

Osinbajo highlighted that the successful completion of the project will significantly increase the country’s power supply capacity, leading to a better quality of life for Nigerians.

 

In November 2020, the federal government and the Transcorp Power Consortium signed a share sale and purchase agreement in relation to Afam Power Plc and Afam 3 Fast Power Limited.

 

The National Council on Privatization approved the privatization of the Afam Power Plant back in August 2017, which triggered a competitive bidding process involving 12 prospective investors.

 

After careful consideration, Transcorp Power Consortium emerged as the preferred bidder with a combined offer of N105 billion.

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