Okay, Let's look at the evolution of Nigeria's Electricity Sector.

Trust me, it will be interesting😎😅

In 1896, the first electricity was generated in lagos by the british colonial government as a street lightning to avoid burglary and other social vices.

THREAD!!!

https://twitter.com/MSIngawa/status/1791574627237388604

The light will be on up to 11pm before they turn it off.

The street lighting failed to achieve the purpose of putting an end to burglary activities in Lagos.

In 1929, The Nigeria Electricity Supply Company (NESCO) was established to properly

The implementation of a decentralised electricity system in Nigeria has officially begin.

This will be an interesting journey guys, I'm excited.

Enugu State are the pace-setter in this journey.

Follow me, let's simply explain what happen and what to expect.

Thread!!! The @NERCNG are the apex regulators in anything electricity in Nigeria.

The law has changed, given state power to also regulate and participate in the electricity activities.

Let's us discuss this inflation and exchange rate issue together.

Dollar rate is down, prices of goods are increasing.

Dollar rate is up, prices are also increasing, ahhh wahala oooo😅

We all should be worried. but why?

Thread!!! There are a lot of issues, uncertainties and problems leading to all this.

The first thing I will say is that most economic indices tend to lag especially if it's good for the economy at a point in time.

The positive effect of low fx rate will NOT come immediately

Let us take a look at what causes national electricity grid collapse and how it occurs.

What will happen before a grid collapses.

I will try to explain in a layman way.

Thread!!! There are 26-grid connected power plants currently.

These power plants generate the power that the entire country uses, and it's synchronised and distributed across the country by the TCN.

TCN are the ones that handle the distribution of power by sending it to Discos.

CBN clears backlog. What does that mean for the fx market?

I think we should understand that fx backlog is just a liability against CBN by various companies.

Does it impact our foreign reserves? Yes, of course.

Thread!!! The reason why the backlog has piled up is because we keep doing international transactions without settling the parties involved, and the liabilities keep growing.

The reserve we ought to use to settle the parties, we have been using it to defend the naira at

Most arguments we had here are because either people do not understand how the system works or some people love to push an agenda because it benefits them.

What happens if you use a Naira debit card in Biannce?

It's simple, let's look at it.

https://twitter.com/HabuSadeik/status/1763258751639748680

For those of us who traded in Binance prior to the CBN ban, you can recall how you used to deposit funds in the app.

Let me walk you through the process illustratively

If you use your ATM card in Binance, the money will not go to Binance directly.

Okay, CBN increases MPR rate and guys are asking question to what does that mean.

No be say I no wan explain am, I go finish writing my english someone will say na just theory😂😂

No wahala, for the sake of learning purposes, let's look at what the numbers below are

Thread!!! In simple terms, MPR rate is the rate that banks and Other financial Institutions (OFI) used to set their own interest rate.

Before, the MPR rate is 18.75%, the MPC just increased it 22.75%.

Is it possible for the government to return fuel subsidy? N400/litre?

Is it possible to reverse the fx subsidy by pegging to N600/$

This is a question that a lot of non-economics people are asking.

Well, follow me lets take it step-by-step and see if its possible

Thread!!! The beauty about economics is that every decision has a pros and cons.

if you look at the decision and you did not find both the pros and cons, then either you're being bias or you did not understand the situation.

Fuel subsidy to N400/litre?

let's do the economics

So I was partially right.

The problem of epileptic power supply is not a gas constraint issue, but the Gas companies refusing to supply GenCos until they are paid.

We are in deep trouble.

Let me try to explain why

https://twitter.com/HabuSadeik/status/1757396150376669657

If care is not taken, steady electricity like before might be difficult to even get.

Someone of you will even say where is the steady electricity 😂😂 okay naa, if it gets worse, then you will appreciate the previous situation just like how some are appreciating Buh....😉

Okay, on the CBN angle, I think they are getting things right.

Let's look at it...

CBN has actually liberalise the Naira and devalue it further to encourage market participation.

If people in diaspora sent you money, Banks/IMTOs will convert and sent Naira to you in the prevailing market rate, remember there is nothing like official rate again because CBN has allow the dealers to transact without limitation to either

1. Spread (profit) or
2. FIxing official rate

This means if the black market is trading naira at

The Secret behind your electricity bill

Let's try to understand and learn how we consume electricity or how our prepaid meters are consuming 200, 300 units in a month without explanation😂

Okay, I promise there will be no technical jargons

Thread!!! Rt For every Item of appliances that you own, be it TV, Laptop, iron etc it usually comes with its power measurement known as "Watt"

They used Watt to measure the capacity of how an appliance can consume energy.

NNPC Accounts for 2022.

NNPC acquired 20% ownership of Dangoter refinery. The 20% ownership cost $2.76 billion.

NNPC don't have money to pay for the $2.76b, so they went to Lekki refinery funding Ltd to borrow $1 billion.

Lekki refinery gave them a $1b loan, the transaction Cost for the loan is $36 million.

The total loan value is $1.036 billion.

NNPC will repay the loan by supplying Lekki refinery 35,000 barrels of crude oil per day starting August 2023.

NNPC will repay the principal and interest of 3-months libor plus 6.125%

Electricity Billing

How does the Discos billed you as a postpaid customer without meter?

On electricity billing methodology, let's see who cheats who, according to the market processes.

THREAD! Let's assume the average cost of power is N50/Kwh and

The selling price of power is N70/Kwh

Let us use Gombe town as a case example to illustrate how it is done.

Assuming in October, Gombe has received a total of 2,000,000 Kwh units of power from the national grid.

CBN circular means rice, and 42 other items will be imported by sourcing funds through the fx rate.

What does that mean for:

1. Exchange rate
2. Price of rice et al
3. Inflation

Mallam Audu will go to the I&E window to source for Fx and import foreign rice to resell in 🇳🇬 Yes, him going to the I&E windows will put pressure on the fx.

The good side is that he will no longer visit the black market to look for dollars, and this will remove pressure on the black market.

The pressure will shift from black market to official window

This is where people are wrong. Sometimes, I refrain from talking about this because people react emotionally rather than reasonably.

Economics theories are just a bunch of english language that tries to predict how humans will react to varying circumstances. In essence,

https://twitter.com/MSIngawa/status/1711703244475400442

It is about human behaviour.

Economic theories are psychological. They are predicting human behaviour in response to a phenomenon.

Economics will tell you law of demand.

Higher demand lower prices.

The same economics went further to tell you about the abnormal law of demand

HOW ELECTRICITY WORKS IN NIGERIA

Let's educate ourselves today on how Nigeria Electricity works from source to consumption.

I will try to be as layman as possible. No engineering jargons I promise, though I myself not an engineer but aspiring engineer-accountant😅😅

THREAD! There are 3 kinds of important station on how electricity is distributed.

1. Generation Station
2. Transmission Station
3. Disco Station or Injection Substation

1. Generation Station is where they generate the electricity either using gas or water (hydro).

Person with a wife who earn 100k in a month, that's how they spend the money.

1. Gas 8k
2. Electricity 15k
3. Dstv 6k
4. Wive upkeep 5k
5. Varieties of food stuff 45k
6. Black taxes 15k
7. TP to work 25k
8. Necessary but avoidable expense 10k
9. Miscellaneous 10k

https://twitter.com/Galadanci02/status/1674820696025833477

Yes, if you add all this, you will realise it's 139k, but his earnings are 100k. Where he gets the 39k deficit is his own wahala, but he has to spend all what is listed above. This is with assumptions that he doesn't own a car.

People who earn 50k and are married,

Congratulations in advance to electricity customers under Abuja, Ikeja, and Eko Disco.

1. @NERCNG is fast tracking the process of giving approval for bilateral arrangements between these 3 Disco and Gencos in line with sections 32, 25(c), and 26(1)a of EPSRA act 2004. 2. This means the Discos will be given light directly from the Gencos on a certain agreed % which is more than the status quo.

3. The Discos are responsible for paying directly to the Gencos what they despatch to customers.

Painful policies; subsidy removal and unifying exchange rate.

You may not like my thread, but it's the reality, so brace for impact if such policies are executed successfully.

Let's go.

A thread! Let me start with unifying our exchange rate. This means that we will have a single rate that is determined by the forces of demand & supply.

If such happens, then our dollar rate will be something around N600 to N700 based on the DD & SS.

Finance, economics, and investment related practical questions.

A learning zone for layman.

If you know the answers, you can help us provide them for others to learn.

Thread!!! What is the major difference between monetary & fiscal policy?

Bad supply of electricity in Ramadan

It's mediocrity to believe that Discos are not giving electricity because it's Ramadan.

Shortage of electricity supply is always caused by the following reasons:

1. Insufficient generation capacity - an entire country feeding from an average of 2500MW to 4000MW will not be enough

2. Frequent outages as a result of faults or maintenance during this hot weather - this is almost the major issue we are facing in this country. During this hot weather, electrical items spoil very easily, especially when