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NDPHC lacks competence, capacity for gas supply contracts for Nigeria, say senators

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There may be no end in sight for the lingering hiccups in the power sector as the Niger Delta Power Holding Company (NDPHC), one of the major players in the sector has been written off by the Senate Committee on Power for lacking capacity and competence to enter into gas supply contracts on behalf of the country.

Recently the Senate Committee on Power launched investigation into the make up gas (MUG) titled “Need to investigate the controversial Make Up Gas (MUG) processing deal involving the Federal Ministry of Finance, Niger Delta Power Holding Company (NDPHC), Calabar Generation Company Limited and ACUGAS Limited”.

At the investigation, the Senate committee members expressed displeasure at the way and manner the Niger Delta Power Holding Company (NDPHC) handled gas supply contracts that left huge liabilities for the nation.

During the proceeding, the Managing Director, Niger Delta Power Holding Company (NDPHC), Chiedu Ugbo said NDPHC has been taking gas from ACU Gas, which they used to generate power from the Calabar Power Plant to the national grid

According to him, in terms of payment payment, there are two issues: payment for what was consumed and payment for Make Up Gas (MUG), which he called “undisputed and disputed”.

He said they were not able to pay for the gas that was consumed because EMBET receipt from the market doesn’t cover what they have generated and NDPHC passed their invoices to the guarantor, which is the Federal Ministry of Finance (FMF).

He said it was clear “we generated this amount of energy using this amount of gas; however, Nigerian Bulk Electricity Trading (NBET) Plc has not been able to pay. So, you are the guarantor, pay and whenever NBET pays we will pay you back”. That is payment for what was actually consumed.

Taking this year, for example, he said “in January, we got 9.43% of our invoice paid. That invoice has about 65% gas cost. In that situation, we passed it to the FMF as a guarantor to pay because we have utilized the gas to generate the energy and sold to EMBET, but due to liquidity issues NBET is unable to pay, same with February and March”.

On MUG, Mr. Ugbo said because of the dispute on it between NDPHC and ACUGAS, FMF came up with the initiative that all the electricity generation companies’ MUG be taken and “repurposed”.

At this point, having listened to him, the Senate couldn’t hide its disenchantment with NDPHC and the vice chairman of the committee, Senator Lola Ashiru (Kwara South) said one thing they have discovered was that they were not sure if NDPHC has the capacity to purchase gas for your Generation Companies (GenCos).

“If the Federal Ministry of Finance is not there in the background, there is no way you could perform. There are so many things you are not sure of. You are not sure how you are going to off load the energy you are generating. You are not even sure the TCN will transmit neither are you sure there will be payment for whatever you are selling out.

“Looking at all these things, there is issue of capacity to enter into contract. When there is no capacity to enter into contract, what it means is that the existence of your business is in doubt.

The only way we can get out of this is a total renegotiation and when you are doing total renegotiation, you must be sure of your own capacity to do business. If you are not sure of it, we will just be going round and going deeper into debt. I advised that you should do a clear study of your own position.

“The world is going private. We were with Dangote at the weekend. It is a private enterprise and we were so amazed. He has thrown in almost $22bn into his business and he is very sure that he will succeed.

Now we are talking of our own GenCos and every day of our lives we are going deeper and deeper into debts. I don’t know what we should do at this stage, but I think it is important for you to carefully to carefully restructure your business, to carefully restructure yourself and repackage all these indices into a new contract renegotiation.

Speaking further, another senator said “the matter has become “a naughty issue”, adding that he was getting confused.

Chairman of the investigative committee, Senator Enyinayya Abaribe asked the MD, NDPHC if the have the right to go into contract negotiation that involves the Federal Ministry of Finance and therefore the country without the involvement of the Federal Ministry of Justice. He said the committee has a letter from the Attorney General of the Federation that the Federal Ministry of Justice was not involved in any MUG agreement.

“It is very surprising for us that you commit the country to this amount of money without the involvement of the Ministry of Justice”, Abaribe said.

However, the MD, NDPHC said this agreement was signed with take or pay provision in 2011, adding that at that time nobody anticipated the liquidity problem in the sector. The Attorney General, when it went to them for the gas supply agreement, reviewed it, took it over. Before we signed the PRG, the Attorney General’s office cleared it for everybody, for Federal Ministry of Finance, for us, i.e for gas supply agreement as at 2016, 2017; the renegotiated one.
Mr. Ugbo said the MUG was purely a Federal Ministry of Finance affair and NDPHC was only informed about it.

Dahiru Moyi, Special Assistant to the Minister of Finance and Coordinating Minister of the Economy, while answering a question from the senators on the outstanding volume of the MUG said “there are many lapses as I said. If we start to go deep into this things we will never end. So, the Ministry of Finance, to say at least, let’s put aside all things and find solution.

He said the outstanding MUG as at December 2022 is about 26 billion cubic of gas (bcf). That will bring $300 million to the Ministry of Finance, if it is Liquefied and sold as LNG. That was the idea and it’s growing by the day.

“We believe in 13 years, the Ministry of Finance will stop this hemorrhage, at least be able to get something to pay and support other projects. We cannot use money appropriated for a project to do this. It will cause a lot of disruption in the whole fiscal environment.

According to Mr. Moyi the MUG today may be 30 or 40 bcf, only ACU Gas may give us exact figure, adding that “the problem is that NDPHC contests and disputes everything unilaterally as you heard ‘force majeure’ without getting Ministry of Justice involved.

But Mr. Ugbo said they have done a lot of things. “We said we could use the gas in Alaoji and Calabar. As we speak, NDPHC have finished the pipeline from ACU Gas to Alaoji.

However, this seemed not to impress the committee members who felt that the country’s scarce resources were not being properly utilized to solve the problem

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Legislature

Adebayo Defends National Assembly’s Power to Remove CCT Chairman

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Prince Adewole Adebayo

The Social Democratic Party (SDP) presidential candidate in the 2023 general election, Prince Adewole Adebayo, has addressed the controversy surrounding the National Assembly’s removal of the Code of Conduct Tribunal (CCT) chairman.
Speaking on the matter, Adebayo argued that the legislature acted within its authority and emphasized the importance of integrity in public institutions saying that they have the power to remove the president and Commander-in-Chief of the Atmed Forces

The Nigerian Senate last Wednesday, invoked Section 157(1) of the 1999 Constitution (as amended) to remove the Chairman of the Code of Conduct Tribunal (CCT), Danladi Umar, from office.
The decision followed the adoption of a motion sponsored by Senate Leader, Senator Opeyemi Bamidele (APC-Ekiti), during plenary.
The motion titled “Invocation of Provision of Section 157(1) of the Constitution for Removal of the Chairman of the CCT” was unanimously supported by the Senate.

Senator Bamidele, while presenting the motion, emphasized the sacred role of the CCT in maintaining high moral standards in government business and ensuring public officials adhere to principles of accountability and integrity.
He argued that the conduct of Danladi Umar fell short of these expectations.
Key allegations against the embattled Chairman according to the Senate leader included Corruption and Misconduct with Multiple petitions alleging corruption and misappropriation of funds.
There were Reports of Mr. Umar being absent from office for over a month without official permission.
He was also accused of refusal to Cooperate with Senate Investigations as he only appeared once before the Senate Committee on Ethics, Code of Conduct, and Public Petitions and avoided subsequent invitations.
He was also accused of engaging a physical altercation with a security guard in the Federal Capital Territory, an incident described as unbecoming of a public servant coupled with ongoing investigations by the EFCC, ICPC, and DSS which the senate refferred to a gross misconduct and negligence.
The Senate replaced Umar with President Bola Ahmed Tinubu’s nominee Mr. Abdullahi Usman Bello whose appointment was confirmed on July 4, 2024.

This decision has sparked criticism, with some legal experts arguing that the legislative body relied on a section of the Constitution—Section 157(2)—that applies to the Code of Conduct Bureau (CCB) and not the tribunal.

Critics claimed the removal process was flawed and that the legislature overstepped its bounds.
However, Adebayo who is also constitutional lawyer of repute dismissed the assertions, asserting that the National Assembly has the constitutional authority to discipline public officers, including the CCT chairman.
Adebayo explained that under the principle of separation of powers, the executive, legislative, and judicial branches serve as checks on each other.
“The National Assembly has oversight powers over public institutions, including the judiciary. The CCT chairman, while heading a judicial body, is still a public servant subject to the disciplinary powers of other branches of government,” Adebayo said.
He added that the Code of Conduct Tribunal, unlike the superior courts, operates as a unique judicial body tasked with trying violations of the Code of Conduct. As such, it falls within the legislature’s purview to act when misconduct occurs.
“If the National Assembly and the executive agreed that an official should be removed, that decision stands. The same principle applies to other branches of government intervening in cases of misconduct within their counterparts,” he explained.
Adebayo emphasized that the debate should not be reduced to legal technicalities but should focus on the ethical standards required for such critical roles.
“The chairman of the CCT is the custodian of public ethics. Any hint of misconduct undermines public trust in the tribunal and the judiciary. Someone in such a position must be above reproach, as their role is to enforce the same standards they must exemplify,” Adebayo said.

Reports of alleged misconduct involving the former CCT chairman, including unprofessional behavior, have further fueled public outcry. Adebayo argued that officials in such positions should step down voluntarily when their integrity is questioned.
Addressing the legal arguments raised by critics, Adebayo highlighted the difference between the Code of Conduct Bureau (CCB) and the Code of Conduct Tribunal (CCT).

“The CCB is an administrative body under the executive, responsible for compliance and asset declaration. The CCT, on the other hand, is a judicial body tasked with trying violations of the Code of Conduct. While the two institutions are distinct, both are subject to oversight and discipline by the legislature and executive,” he explained.

Adebayo urged Nigerians to approach the issue with objectivity, focusing on accountability rather than partisan arguments.

“The removal of the CCT chairman is about preserving the integrity of our institutions. This is not a matter of partisanship or legal maneuvering—it’s about ensuring that public servants are held to the highest ethical standards,” he said.
While some critics have called for judicial intervention to challenge the removal, Adebayo maintained that the National Assembly’s actions align with constitutional principles.
He emphasized the need for public officers, particularly those in sensitive roles, to maintain the highest levels of decorum and professionalism.

“This incident should remind us of the importance of accountability in governance. The integrity of our public institutions must remain sacrosanct,” Adebayo concluded.

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Legislature

NASS modifies NDLEA Act, Prescribes Life Imprisonment for Drug Traffickers

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The National Assembly has modified the National Drug Law Enforcement Agency (NDLEA) Act to prescribe life imprisonment for individuals found guilty of storing, transporting, or concealing illicit drugs and substances. 

The amendment was adopted on Thursday during plenary, presided over by Deputy Senate President Barau Jibrin, following broad support from the senators.

The amendment reflects a harmonised position of the Senate and the House of Representatives on Section 11 of the NDLEA Act. 

The House had earlier passed an amendment prescribing life imprisonment for drug traffickers, while the Senate had proposed the death penalty.

To reconcile the differences, a conference committee of both chambers was convened. Senator Tahir Monguno, Chairman of the Senate Committee on Judiciary, Human Rights, and Legal Matters, presented the harmonised version to the Senate. 

He urged lawmakers to adopt the House’s position of life imprisonment, arguing that enforcing the death penalty could lead to the execution of over 900 accused persons currently awaiting trial for drug-related offenses.

The Deputy Senate President who presided over the plenary had put the resolution to a voice vote, and the majority of senators supported the amendment. 

The approved version stipulates life imprisonment for offenders.
The amended section now reads:
“Anybody who is unlawfully involved in the storage, custody, movement, carriage, or concealment of dangerous drugs or controlled substances and who, while so involved, is armed with any offensive weapon or is disguised in any way, shall be guilty of an offence under this Act and liable on conviction to be sentenced to life imprisonment.”
This amendment aims to strengthen the fight against drug trafficking while addressing concerns over human rights and the judicial implications of the death penalty.
The move is part of efforts to curb the growing menace of drug trafficking and its adverse effects on Nigerian society. According to Senator Monguno, the life imprisonment penalty strikes a balance between deterrence and humane judicial practice.
With the amendment, the NDLEA now has a robust legal framework to prosecute offenders and combat drug-related crimes effectively.

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Legislature

President Tinubu urges Senate to approve ₦1.767trn External Loan

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Bola Ahmed Tinubu

President Bola Ahmed Tinubu has formally requested the National Assembly’s approval for a $2.209 billion (₦1.767 trillion) external borrowing plan to finance part of the ₦9.17 trillion fiscal deficit in the 2024 budget. The loan, included in the 2024 Appropriation Act, is critical to the government’s broader strategy for economic recovery and growth.
In a letter to Senate President Godswill Akpabio, President Tinubu noted that the borrowing aligns with the provisions of Sections 21(1) and 27(1) of the Debt Management Office (DMO) Establishment Act, 2003. He also indicated that the Federal Executive Council (FEC) had approved the plan.
The President explained that the funds would be sourced through Eurobonds or similar external financial instruments. A detailed summary of the loan’s terms and conditions accompanied the letter to guide legislative scrutiny.
“This borrowing is necessary to address the budget deficit and fulfill our fiscal strategy for 2024. Swift approval will enable us to move forward with mobilizing these funds,” the President stated, emphasizing the urgency of the request.
Senate President Akpabio referred the matter to the Committee on Local and Foreign Deb

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