NOSPETCO: Trumpeted on the aegis of Lack of electricity

• Present Electricity Generation
  
• Making Millionaires of the Industrial Generator and Diesel distributors
• NOSPECTO more than just a coincidence.
  
• Conclusion; NOSPETCO: To Gamble or To Invest

Get some info on what NOSPETCO is and read my comments on Dipo's highly controversial blog DIPO TEPEDE.POET

Present Electricity Generation

The nation’s power sector is a critical
infrastructure needed for the economic, industrial, technological and social
development. Electricity consumption has become one of the indices for measuring
the standard of living of a country.
Timothy Okwu Business Times

Facts:
In Nigeria, the power sector is presently being managed by the Power Holding Company of Nigeria with the assistance of 18 new companies created for the generation and distribution of efficient and stable power.

2. Prior to the change of name from National Electric Power Authority to PHCN the national electricity grid presently consists of 3 hydro and 6 thermal generating stations with a total installed generating capacity of 5906MW. Although the installed capacity of the existing power stations at that point in time was 5906MW, the maximum load ever recorded was 4000MW. Most of the generating units have broken down.

3. Problems facing PHCN: radial and overloaded transmission lines, obsolete switchgears, overloaded distribution transformers etc. These are besides the usual preposterous excuses of no rain/water, or a blown Escravos pipeline etc.

4. The present installed generating capacity in Nigeria is around 6000MW and PHCN has only been able to generate a maximum of 4000MW. Compare this with South Africa’s’ 40000MW generated to meet the electricity demands of 65million people.

5. Since inception of the President Obasanjo administration PHCN has received an annual average funding of about N200bn i.e. N1.6trillion ($12.6bn) and yet the abysmal performance of this power generating lame duck company gets only worse everyday.

Making Millionaires of the Industrial Generator and Diesel distributors

As a result of poor generation of electricity, which is one of the worst in the world judging by “developing nations” standard, investors in industrial generators and allied businesses such as Mikano, Leventis, and Zenon Petroleum are smiling to the bank. As a matter of fact, rumors (probably due to frustration) have being growing increasingly strong about the romance of some of these investors and the present government (especially after noting the presence of business tycoon and giant of diesel distribution Mr. Femi Otedola at one of the party rallies). The issue here is, owners of petrol stations (servicing personal/household generators), Generator distributors as mentioned above and even small generator distributors like those that trade the Tiger brand, diesel distributors and related businesses (servicing industrial generators) have found a gold mine in our penury. Hence, the increasing popularity of the mysterious company; NOSPETCO.


Nospetco: More than just a coincidence.

In view of all these i.e. the economic consequences of the present lack of adequate electricity and the political climate as of today, it does not come to me as a surprise the increasing popularity of the company, shrouded in secrecy and advertised by word of mouth, called NOSPETCO. The gambling spirit of Nigerians, the disease of financial blindness, the demon of quick riches, has come to dance in our midst again. But it is not the first. Look around you; it is one “promo/lotto” or the other. Have you considered Intercontinental Bank Plc’s Happy Savers Promo it is selling like sh-t. Or the BankPHB’s 2 for 1million promo, don’t forget the Coca Cola Lift Off and Win promo, neither should you leave out the UBA zero account opening “Draw”. Think deeply about the proliferation of National Lottery Kiosks then it will dawn on you that certain entrepreneurs have found a weakness in the Nigerian society; the quick riches spirit. This same spirit is responsible for the presence of the now ubiquitous “yahoo” boys. It is age old. Remember the days of the 419ers a.k.a. nineteen guys? Judging by the way NOSPETCO is being embraced, it is all too easy to recognize this spirit. An evil genius idea would be to set up a casino!

NOSPETCO: The Facts.

“The more you read financial statements, annual reports and Prospectuses,
the more your financial intelligence, or financial vision, increases...” Robert
Kiyosaki, Author, Guide to Investing.

The fact is that there are no facts. All we know about the company today is what has being fed to us by the gluttonous public, eating up every little chance of being rich with a greed underpinned by ignorance. A True Investor knows that there are several steps to take before investing in a company. Some of them include; gaining possession of the financial statements of a company for (at least) the last 3-5years, knowing the management team (this does not just involve knowing their names, it also means knowing their qualifications in order to weigh their competence), knowing the company’s transparency level, knowing the industry in which the business operates etc. A peep into the book Buffettology by Mary Buffett which chronicles some of the investment methods of (arguably) the greatest investor of all time and present 2nd richest man in the world Warren E. Buffett gives the following insights:
Some questions to determine what business to buy:
Is the company in an industry of good economics? i.e., not an industry competing on price points.
Does the company have a consumer monopoly or brand name that commands loyalty?
Can any company with an abundance of resources compete successfully with the company?
Are the earnings on an upward trend with good and consistent margins?
Does the company retain earnings for growth?
Does the company re-invest earnings in good business opportunities?
Does the Management have a good track record of profiting on these investments?
Is the company free to adjust prices for inflation?
Does the company have high and consistent Return on Total Capital?

A mere glance at these questions reveals that those putting their money in NOSPETCO are not financially intelligent people. You need a high level of research to be able to determine the answers to these questions. Up to the time of writing, this has been impossible (I don’t even know the CEO’s name not to mention the directors. In fact, are there any directors?)

Conclusion; Nospetco: To Gamble or To Invest

The first thing to realize is that NOSPETCO is not a viable investment vehicle. The fact that it has made some people some money does not make it a good investment. At least people make money in Las Vegas too. My advice to potential entrepreNoirs is simple: do not invest in NOSPETCO until they have made public generic business information. But you could gamble some free money if you have some, just don’t call it an investment. The odds seem in favour of NOSPETCO for now since a lasting solution to our electricity crisis is not in view. The odds are in your favour too if you put N450,000 in the National Lottery. I will leave you with a few facts:

“According to Dr. Ransome Owan, chairman/chief executive officer, Nigerian
Electricity Commission approval has been given to 26 private firms for
establishment of IPP in various locations in the country. For those that have
come on stream, they are expected to boost the nation’s power capacity to an
estimated 10,000MW.”

“Government had since directed the Nigerian
National Petroleum Corporation to develop the country’s biofuel potential with
cassava and sugarcane crops…”
More than 400,000 hectares of land is to
support high-yield sugarcane operations in the country. Sugarcane and cassava
are to be used in the first instance to create a 10percent biofuel – 90percent
fossil fuel blend.
MTN is said to be deploying biofuel as alternative energy
source to power the numerous base stations in Southern Nigeria…” Culled from
Business Times March 12 >> 18

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