The average ‘Band A’ customer in Nigeria will now need as much as N170,000 for electricity per month, instead of the average of N50,000 that they were paying before now.

This follows the approval of a 240 per cent increase in the tariff of ‘Band A’ power customers from N66 per kilowatt hour (KwH) to N225/KwH starting from this month.

The Nigerian Electricity Regulatory Commission (NERC) yesterday approved an increase in the rate paid per Kwh of electricity from about N66 to N225 for the various distribution companies (DisCos) in the country.

Vice chairman of NERC, Musliu Oseni, speaking at a press briefing in Abuja on Wednesday, however, said the increase in tariff will only affect customers enjoying 20-hour power supply and above across the country. Other customers in Bands B, C, D and E who consume less than 20 hours of electricity per day are not affected by the increase.

NERC also stated that only a fraction of the over 3,000 DisCos’ feeders, that is fewer than 481 feeders, will be impacted,  and this represents 15 per cent of the over 12 million electricity customers captured in the Nigerian Electricity Supply Industry (NESI).

Oseni also revealed that NERC had also ordered that the majority of the feeders which did not previously meet the 20-hour supply threshold be downgraded to lower bands.

“We currently have over 800 feeders that are categorised as Band A, but it will now be reduced to under 500. This means that 17 per cent of the feeders now qualifies as Band A.

“The commission, using technology, discovered that many of the feeders that the Electricity Distribution Companies currently brandish as Band A are not meeting the required service and as such the feeders were ordered to be downgraded immediately as a way of protecting consumers,” he said.

According to him, as part of enforcement mechanisms  to ensure that  areas affected by the review get the 20 hours supply,  DisCos have been mandated to set up rapid response teams in locations where the feeders are located.

“This is to ensure that the customers can have access to the DisCos. They have also been mandated to publish the contact of the rapid response team where the customers are located.

“Failure to meet the commitment for seven consecutive days, the feeder will be downgraded immediately to the service level the DisCo is able to provide electricity to the feeder,” he said.

Oseni said where a DisCo  failed to meet the commitment for two days, by the third day at 10am, the company must publish an explanation also via bulk SMS contacting the affected consumers on the feeder.

“They should explain why they could not meet the service for the two days and also submit the explanation to the commission,” he said.

LEADERSHIP reports that the Labour associations and the concerned public had advised the government not to remove electricity subsidy as canvassed by the International Monetary Fund (IMF).

In its recent report entitled ‘IMF Executive Board Concludes Post Financing Assessment with Nigeria,’ the IMF reiterated the importance of eliminating the subsidies to redirect resources towards more targeted and impactful social welfare programmes.

Amidst the prevailing cost-of-living crisis, the IMF proposed targeted social transfers to provide temporary assistance to the most vulnerable segments of the Nigerian population.

LEADERSHIP reported that the government may have concluded plans to hike electricity tariff to relieve pressure on fiscal spending. The federal government had now reduced electricity subsidies for 15 per cent of consumers to reduce its N3.3 trillion ($2.6 billion) cost, part of a series of reforms to ease pressure on public finances.

With the recent price hike, LEADERSHIP analysis indicates that an average Band ‘A’ consumer with the following appliances: one deep freezer, one fridge, three fans, two air conditioners, 15 bulbs, one pressing iron, one microwave oven and one electric kettle, who needed an average of N50,000 monthly to power his or her appliances before now, will now need N170,000 on the average to power his home, due to the new 240.9 per cent increase in tariff.

Also, the N50,000 electricity expenses, which could previously provide 757.57KwH or units, will now purchase only 222.2KwH or units.

Justifying this extra charges which will put further strain on the finances of many Nigerians, the NERC explained that these premium customers can now comfortably reduce or completely do away with their expenses on diesel and petrol generators as they will be enjoying quality power supply of 20 hours or more.

Oseni also gave assurance that where the stipulated hours are not fulfilled by the DisCos, the customers will be downgraded to lower bands.

Reacting to the new tariff regime, Labour groups and electricity consumers have frowned at the decision of the federal government to hike electricity tariffs for customers in Band A across the country.

This is even as Nigeria’s manufacturing sector is considering establishing its own power generation facility to cushion the effect of the new tariff announced by the federal government.

While the leadership of Nigeria Labour Congress (NLC) has warned the federal government against plunging Nigerians into further hardship amidst the current cost of living crisis, electricity consumers, especially Small and Medium Enterprises (SMEs) have said such increase in electricity tariffs will lead to higher operational costs, coupled with the fact that so many goods and services are already on the high side at the moment.

NLC said additional hike in electricity tariff despite the poor supply at this critical time will not be a good decision.

The union noted that, with Nigerians trying to survive the current economic realities, a good government ought to think of how to address the their immediate needs rather than embarking on an over 300 per cent hike in electricity tariff.

NLC acting deputy general secretary, Comrade Ismail Bello, in a chat with LEADERSHIP, reiterated the earlier call by Labour against privatisation of the sector.

He said, “What is happening now is reconfirmation of what we told the general public and federal government during the privatisation period – that privatisation was not the solution to the problem in the sector.

“During the clamour for the privatisation, we told the government the ills of privatisation but they went ahead against the wish of Labour. We then warned the government that privatisation without good services will have effects on the population.”

Comrade Bello called on the government to have a rethink on the hike as it will add additional burden on the already suffering citizens, and push more Nigerians under the poverty bar.

‘What Nigerians need most at this period is to address the current economic realities rather than pushing them into more hardship with further hike in electricity tariff,’ he said.

Speaking with LEADERSHIP yesterday, the immediate past chairman of the Apapa branch of the Manufacturers Association of Nigeria (MAN), Frank Onyebu said that, already, manufacturers are incapacitated by irregular supply which makes in-country produced goods not competitive. He stated that the decision is ill-timed and insensitive given the prevailing economic situation in the country.

According to him, stakeholders were not properly carried along in the hurried decision, and the manufacturers’ association may have no option but to fast-track the establishment of its power generation facilities.

According to him, since the government is not considering the plight of the informal sector, they will take strategic steps to support their businesses.

He recalled that the International Monetary Fund (IMF) had been pushing for the hike which had met resistance from Nigerians but lamented the government had chosen to move along in that direction.

Onyebu, who is also the managing director of Universal Luggage Limited, said corruption is endemic in the management of electricity and petroleum industries.

Government, he said, should rather begin to think of how to boost food production and deploy infrastructure to support economic activities, noting that there is nothing to signify that money realised from petrol subsidy removal has been well utilised whereas the cost of running government is rising daily.

In his reaction, the convener of PowerUp Nigeria, Adetayo Adegbemle, said the increment is a long time coming.

“We have spoken so much about the federal government not being able to continue to carry the huge subsidy on electricity, and this is them acknowledging everything we have been telling them,” he said.

According to Adegbemle, the hike is not about helping the distribution companies, but it is about appropriate pricing for electricity.

He argued that this pricing is also along the whole value chain.

“You will recall that gas pricing also recently changed, so there’s no way the price of electricity will remain the same, especially with all macroeconomic indices having also increased.”

“We also need to understand that the power sector is mostly a private concern now, and it is no longer a government utility; so appropriate pricing is needed for us to see the growth of the industry,” he noted.

On adequate metering, he said the regulatory commission spoke about metering initiatives by the government, and at this point it is important that these metering initiatives are pushed through.

“We are also asking that institutional financing should be encouraged through regulations, maybe amending the MAP Regulations so that the huge metering gap can be closed up,” he added.

On his part, the chief executive officer (CEO) of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the power sector issue had become a major conundrum in the economy, stating that there is a major funding and liquidity crisis which is posing significant risks to investments in the electricity value chain.

“Costs across the chain have been rising as a result of the multiple macroeconomic headwinds. Meanwhile, the system is not generating the desired liquidity to match the escalating costs. Tariff review is thus an inevitability, but a 300 per cent increase in one fell swoop is difficult to justify,” he said.

He, however, expressed relief that the increase is not across board as only 15 per cent of electricity consumers are affected, targeting the segment with the highest ability to pay, which reflects some attributes of equity in pricing.

Dr Yusuf pointed out fundamental issues that need to be addressed in the electricity value chain.

“There are issues of technical and commercial losses which are yet to be addressed. These are inefficiency costs that consumers are compelled or expected to pay for as part of the cost recovery argument. And these costs are in billions of naira.

“There is also the exploitative practice of estimated billing. Millions of electricity consumers are yet to be metered,” he stated.

He noted that there is the problem of over centralisation of the power supply through the national grid model, saying there are capacity issues with some of the electricity distribution companies which contribute to the lapses in electricity delivery outcomes.

“The energy mix programme is yet to gain an impressive traction. It is important to fix these fundamental issues in the power sector. Fiscal policy measures should be immediately deployed to reduce costs across the entire electricity value chain,” he added.

A consumer, Sylvanus Okpara’ stated that for small and medium enterprises (SMEs), an increase in electricity tariffs will lead to higher operational costs coupled with the fact that prices of commodities are on the high side at the moment.

“This will have an adverse impact on their businesses, competitiveness and profitability, potentially leading to job cuts or reduced expansion opportunities,” he said.

He urged the government to ensure that vulnerable populations are not disproportionately affected, even as he decried the suddenness of government policies.

A project manager,  Adeniyi Julius, noted that the increment will affect low-income families who find themselves in the category of those that would be affected as they are already financially strained.

According to him, “Low-income families may find it challenging to cope with higher electricity bills. This could lead to decreased usage of electrical appliances, affecting their quality of life and productivity.”

He, however, said the social and political implications cannot be ruled out as Nigerians are going through a lot.

“Electricity is a basic necessity, and any perceived unfairness in tariff increases can lead to public discontent and protests,” he stressed.

Similarly, a resident of Gbagada, Lagos, Blessing Oladipo, said she was not in support of the increase in the electricity tariff.

She queried “Is it the light that is almost nonexistent they are increasing the amount per kilowatt? I don’t even know what they are trying to do.

“For hours and days, we could not see a blink of light. We use prepaid metres. Since the beginning of February, we have hardly seen light. Phones and other appliances will be off for hours without a power source. I don’t know, if you ask others their story may be different, but for me, that has been my experience, and I do not buy into it.”

Also, an Ogun State resident, Ola  Michael said increasing the electricity tariff is not a prudent decision at present.

“It would place undue strain on the populace given the current state of the economy. Furthermore, the inadequate lighting situation is unlikely to encourage compliance with any proposed price hike,” he said.

 [Leadership]

Three residents of Takum town in Taraba State have lost their lives following a severe windstorm that struck the area twice in two days.

The first incident, according to a resident, Mallam Maiwada Takum, occurred on Tuesday evening, causing extensive damage to residential, commercial, school and office buildings.

Takum said the weather initially brought heavy rainfall, followed by a powerful windstorm that lasted for over an hour and a half.

“The impact was devastating, with some buildings collapsing and many people trapped. Flying debris, including zinc sheets, caused injuries to many residents,” he said.

Yakubu Adamu, another resident, described the windstorm as highly destructive, resulting in significant damage to property and infrastructure, in addition to the loss of lives.

He said three fatalities had been confirmed, and many others sustained injuries.

“The number of casualties and injuries may rise as rescue and recovery efforts continue,” he added.

James Gangum called for urgent assistance from the state government and the National Emergency Management Agency (NEMA) to support those affected by the windstorm.

On Wednesday, another powerful windstorm struck Takum town, causing further destruction to buildings and injuring many people.

The windstorm, accompanied by heavy rainfall, started shortly after Governor Agbu Kefas entered the town to inspect the damage caused by the earlier windstorm on Tuesday evening.

It was gathered that the storm, which began around 2:30 pm on Wednesday, led to the destruction of numerous buildings, including residential homes, schools, electric poles, and trees.

The second incident has hampered the governor’s efforts to assess the previous day’s damage caused by the windstorm.

Mr Emmanuel Bello, the Senior Assistant to Governor Agbu Kefas on Media and Digital Communication, said the governor had entered Takum to inspect the damage caused by the windstorm and that the town experienced another heavy rainfall.

Also, one person has been reported killed and several others injured by a windstorm that also destroyed over 100 houses in Agbashi community, Doma Local Government Area of Nasarawa State.

The Vice Chairman of Doma LGA, John Bako-Ari, confirmed the incident, stating that it occurred on Tuesday evening.

According to Bako-Ari, the windstorm caused extensive damage, including the destruction of over 100 residential houses, the Agbashi Central mosque, part of Pilot Primary School Agbashi, and various other public infrastructure.

Mr Anthony Oshinyeka, the acting Chairman of Agbashi Development Association (ADA), expressed sadness over the incident and the severe impact on the Bassa settlement in Iponu, where one person died and seven others were injured.

Oshinyeka called for urgent government intervention to assist the affected residents.

He specifically requested the immediate release of relief materials and medical aid by the government and charitable individuals to support the affected communities.

 [DailyTrust]

Following the approval of a 250 per cent electricity tariff hike by the Nigerian Electricity Regulatory Commission on Wednesday, DAILY POST outlines what Nigerians should know about the hike.

Recall that NERC approved N225 per Kilowatt for ‘Band A’ electricity customers in Nigeria.

The development represents a significant shift from electricity subsidy in the Nigeria Electricity Supply Industry amid persistent epileptic power supply nationwide.

Customers Affected by Hike

NERC said that only Band A customers received at least 20 hours of power supplies from the eleven electricity distribution companies.

According to the Vice Chairman of NERC, Musiliu Oseni, only 15 per of the 12.12 million electricity customers in Nigeria are affected.

He explained that the tariff hike would not affect customers on B, C, D, and E, having less than 20 hours of power supply.

Implication of New Electricity Tariff

The hike implies that electricity consumers under Band A will pay 250 per cent more to get a power supply.

This means a complete electricity subsidy removal for customers under Band A.

Band A customers fall within 15 per cent of households in Urban areas in Nigeria.

According to NERC, Band A customers consume 40 per cent of electricity in the country.

However, the hike will not lead to an improvement in the electricity supply to the affected customers.

Date of hike commencement

According to the new tariff order, Discos commenced the implementation of the new electricity tariff on Wednesday, 3rd April 2024.

This means customers under Band A have begun paying 300 per cent more for electricity.

Meanwhile, since January 2024, customers across all bands have suffered epileptic power supply in Nigeria.

The Minister of Power, Adebayo Adelabu, blamed gas constraints for the erratic power supply in Nigeria.

The Federal Government plans to begin the issuance of domestic foreign currency-denominated bonds from this quarter, Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, said yesterday.

A Reuters report quoted the minister as speaking at a parley with business leaders in Lagos.

The government move is expected to herald domestic issuance of similar bonds by companies and sub-nationals, a plan already given provisional approval by the country’s apex capital regulator.

The sovereign domestic foreign currency issuance aligns with government’s move to attract more forex inflows to stabilise the naira. Dollar shortages have had significant adverse impact on the naira.

Edun told his audience that the government would seek to sell forex bonds to Nigerians at home and abroad who, “because of lack of faith in the currency, have decided to try to hold and save in dollars.”

“All the funds in the diaspora, we are targeting them. There are all these funds that you have brought into your (local foreign currency) accounts, we are targeting them,” said Edun.

The minister said President Bola Ahmed Tinubu in October 2023 signed executive orders to allow domestic issuance of instruments in foreign currency and also allow all cash outside the banking system to be brought into the banks.

He said that the government had not issued the bonds earlier because it sought to first build confidence in its fiscal policy and gain the trust of citizens who are sceptical of government policies.

Nigeria spends around 78 per cent of its revenue on debt servicing and the government has vowed to cut this to around 50 per cent.

“When they say what keeps you awake at night, I will say paying the debt service (cost),” said Edun.

Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) had given a provisional “no-objection” to the proposal to allow companies and governments to undertake dollar-denominated listings on the Nigerian stock market.

The proposal, being pushed by the Nigerian Exchange (NGX), involves creation of a new listing platform for high-valued issuers to raise capital through dollar-denominated debts and equities issuances.

The proposal is considered as one of the quick-interventions to bolster the country’s foreign exchange (forex) position by exploring alternative sources and redirecting remittances and informal sources to a formal market.

Securities and Exchange Commission (SEC) Director-General Lamido Yuguda said the apex regulator has “no problem” with the proposal for dollar-denominated listings by qualified issuers.

According to him, the basic premise of regulation is full disclosure and demonstrated ability of an issuer to meet the required obligations imposed by the issuance.

He said SEC would treat such dollar-denominated listings by companies or governments on the same basis of the ability to meet the required obligations as contained in the issuance documents, and in line with extant rules at the capital market.

Lamido said investors’ protection is deeply ingrained in all regulatory consideration by the Commission as it continues to explore ways to further deepen the capital market.

The listing of dollar-denominated bonds and shares at the Nigerian stock market is targeted at easing access to forex for select companies, especially high-valued companies that require substantial forex for their operations.

Under the proposed two-phased plan, the NGX plans to start with quotation of dollar-denominated debt issues such as bonds and then move to listing of dollar-based ordinary shares and other quasi-equities.

The provisional approval by SEC is a major boost for the NGX forex proposal.

NGX Chief Executive Officer (CEO) Temi Popoola said the Exchange would work with the SEC to create the required regulatory framework for the dollar-based listing.

Changes to listing regulations can be achieved within a “relatively short time”, Popoola said.

He explained that the Exchange was banking on the market-oriented stance and reforms of the Tinubu administration to push the dollar-listing proposal through.

Popoola said the Exchange would be targeting companies operating from the special economic free trade zones and those earning foreign currency

The primary objective, he noted, is to enable these companies to issue bonds denominated in dollars and eventually offer equity in dollars.

“It could potentially address the challenges posed by fluctuations in foreign currency,” Popoola said in an interview with Bloomberg.

 Bloomberg reported that companies Nigeria consistently cite getting access to the dollars they need for raw materials as their biggest challenge.

The NGX also plans to work with SEC to initiate a framework that allows companies with home listing to pay dividends in dollars. Few companies with dual listings already pay dividends in dollars.

The NGX, which did not give a timeline for the launching of the plan, said government’s willingness to consider market reforms increases the prospect of success.

 “Given the proactive stance of the current administration, it is reasonable to anticipate that these objectives can be achieved,” Popoola told Bloomberg.

He pointed out that both retail and institutional investors have “substantial” amounts of dollars that domestic capital markets can tap to encourage more local listings.

“If the target companies cannot access dollars within our market, many of them may opt to list abroad,” he said.

[TheNation]