COVER
Electricity: 40% Tariff Increase Takes Off July 1
Distribution Companies (Discos) operating in the Nigerian Electricity Supply Industry (NESI) at the weekend alerted their customers to a planned electricity tariff increase from July 1, this year.
Essentially, the Nigerian Electricity Regulatory Commission (NERC) years ago, developed a mechanism, called the Multi-Year Tariff Order (MYTO), under which the expected increase falls.
The regulator insists that this to ensure that the prices charged by licensees are fair to customers and sufficient to allow the licensees to finance their activities and to allow for reasonable earnings for efficient operation.
MYTO, the methodology for regulating electricity prices provides a 15-year tariff path for the Nigerian electricity industry with limited ‘minor’ reviews each year in the light of changes in a number of parameters such as inflation and gas prices and ‘major’ reviews every five years, when all of the inputs are reviewed with stakeholders.
The Discos in statements sent to respective consumers on Sunday, drawing the basis of the increase in MYTO, stated that the review was due to the fluctuation of the local currency, the naira in comparison to the dollar in the exchange rate market.
The Central Bank of Nigeria (CBN) in a bid to ensure parity in the Investors and Exporters (I&E) foreign exchange window, recently took the decision to collapse the official and parallel market prices which has seen the value of the naira drop to as much as N750 to the dollar.
Some of the distribution companies which alerted their customers to the new price range, included the Abuja Electricity Distribution Company (AEDC), Ikeja Electricity Distribution Company (IKEDC) and the Eko Electricity Distribution Company.
Abuja Disco for instance, told its customers that while some bands will have their tariffs increase to N100, others will have theirs raised higher with the new development.
“Effective July 1st 2023, please be informed that there will be an upward review to the electricity tariff influenced by the fluctuating exchange rate.
“Under the MYTO 2022 guidelines, the previously set exchange rate of N441/$1 may now be revised to approximately N750/$1 which will have an impact on the tariffs associated with your electricity consumption.
“For customers within band B and C, with supply hours ranging from 12 to 16 per day, the new base tariff is expected to be N100 per kWh while Bands A with (20 hours and above) and B (16 to 20 hours) will experience comparatively higher tariffs.
“For customers with a prepaid meter, we encourage you to consider purchasing bulk energy units before the end of this month as this will allow you to take advantage of the current rates and potentially make savings before the new tariffs come into effect.
“For those on post-paid (estimated) billing, a significant increment is imminent in your monthly billing, starting from August,” a message from the AEDC stated.
It further advised its customers to reach its customer support team if they needed further questions answered.
Also, the Ikeja Disco in a message sent to its customers, blamed the proposed increase in the rise in some key indices in the industry.
“Dear customers, electricity tariffs are set to go higher on July 1st due to the floating exchange rate. MYTO 2022 set the exchange rate at N441/$1, which may now be adjusted to about N750/$1. We may be looking at a base tariff of N100 per kWh for Band C (12 –16 supply hours per day).
“Bands A (20 hours and above) & B (16 – 20 hours) will be much higher. If you have a prepaid meter, buying bulk energy units for your home or office before the end of the month may help you make some savings before you have to buy at the new rate.
“For those on post-paid (estimated) billing, a significant increment is imminent in your monthly billing, starting from August. Please take note. Electricity units are set to jump by 30-40 per cent in just over a week. You are best advised to buy as many units as you can before July 1,” it stated in the message.
On its part, Eko Disco, which also couched its message in the same manner as the others, described the planned margin of increment as ‘significant’.
“Dear Customers, electricity tariffs are set to go higher on July 1st due to the floating exchange rate. MYTO 2022 set the exchange rate at N441/$1, which may now be adjusted to about N750/$1.
“We may be looking at a base tariff of N100 per kWh for Band C (12 – 16 supply hours per day). Bands A (20 hours and above) & B (16 – 20 hours) will be much higher.
“If you have a prepaid meter, buying bulk energy units for your home or office before the end of the month may help you make some savings before you have to buy at the new rate.
“For those on post-paid (estimated) billing, a significant increment is imminent in your monthly billing, starting from August,” it stated.
The Nigeria Labour Congress (NLC) had recently warned against the planned increase, with the NLC President, Joe Ajaero, stating that the massive rise will not bode well for Nigerians.
“We believe that not even these figures are a justification for this reckless proposed tariff increase. The issue of capacity to pay and quality of service delivery is not only germane but superior to any rationalisation by market logic,” Ajaero stated in a statement.
AEDC Urges Customers to Disregard Planned Tariff Increase
The Abuja Electricity Distribution Company (AEDC) has appealed to its customers to disregard planned tariff increase as approval for such increment had not been received.
AEDC management made the appeal in a statement yesterday in Abuja.
“Please disregard the circulating communication, regarding review of electricity tariffs.
“Be informed that no approval for such increments has been received. We regret any inconvenience.”
However, AEDC had earlier in a statement, said there would be an upward review of electricity tariff from July 1.
According to the statement, the tariff increase is influenced by the fluctuating exchange rate.
“Effective July 1, 2023, please be informed that there will be an upward review to the electricity tariff influenced by the fluctuating exchange rate.
“Under the MYTO 2022 guidelines, the previously set exchange rate of N441/1 dollar may now be revised to approximately N750/1 dollar which will have an impact on the tariffs associated with your electricity consumption.
“For customers within band B and C, with supply hours ranging from 12 to 16 per day, the new base tariff is expected to be N100 per Kilowatts per hour (KWh).
“While Bands A with (20 hours and above) and B (16 to 20 hours) will experience comparatively higher tariffs, ‘’it said.
AEDC encouraged customers with prepaid meters to consider purchasing bulk energy units before the end of June as this would allow them take advantage of the current rates and make savings before the new tariffs came into effect.
AEDC said that for those on post-paid (estimated) billing, a significant increment is imminent in their monthly billing, starting from August.
The Mult Year Tariff Order (MYTO) is the methodology for regulating electricity prices.
It provided a 15-year tariff path for the Nigerian electricity industry with limited ‘minor’ reviews each year in the light of changes in a number of parameters.
These included inflation and gas prices and ‘major’ reviews every five years when all of the inputs were reviewed with stakeholders. (NAN)
Manufacturers Decry Hike, Demand Subsidy
The Manufacturers Association of Nigeria (MAN) has come out to express its displeasure and kick against the nationwide increase in electricity tariff by 40%, saying that the sector was uncompetitive due to high prices used to generate electricity amongst other things.
MAN also pointed out that in the last 8 years of the previous administration, electricity tariffs had gone up by 186%.
President of the Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye, who stated this in an interview with ARISE NEWS yesterday, said that energy payments had consumed 30% of revenues brought out of the industry and is going to cause a high cost of performing business within the nation causing a lack of competition.
“There is no special subsidy we have asked for in the past that we have not addressed. What we had in the past was to have a price fixed over the period of time. We have not really complained so much about this price. The major thing to access ks that within the period where this price was increased and it was a time where we have not agreed that the price should be increased. This cost should ot be passed on to the manufacturers.
“It was increased two times before the time. This made them (MAN) have crude debts to the DisCos. This is what we’re telling government; that this should not be added to our costs because is not what we agreed on.”
Meshioye described the increase as outrageous saying, “This has been an issue over the time. What we have been experiencing is intimidation over our businesses. They will go to our businesses, disconnect the electricity and then nothing will happen.”
As a solution to the imbalance, the MAN president asked that ‘special rates’ should be allotted to manufacturing companies as well as privatization of electrical distribution companies to allow them cope with the increase ensuring that this would bring in investors and encourage competition.
“Encouraging private sectors to invest is very key. That will add competitiveness in the supply value chain of the electricity.
“One, be sure that you meter everyone and ensure they are connected to the grid. Run an efficient system and encourage competitiveness. Look for alternate source of emitting power.
“Apart efficiency in the supply chain, what manufacturing could do using gas and everything. Let me tell you, we don’t have a special tariff on gas so we enjoy seriously. But you remember that manufactures have even complained to NERC on a couple of things. We have road map on how the tariff should be increased. But you find that NERC will just increase it without consultation and without the due time before this tariff should be increased. So you find haphazard way of increasing the tariff.
“This is unfair. We need to be sure that if we agreed on a road map, you follow that road map”
Asides the electricity tariff increase, the MAN president stated that other factors affecting the expansion of the sector include multiple taxation from various arms of government at both state and local level who taxing for the same goal; logistics from ports which can cause delays, ineffective transportation systems and “astronomically high” interest rates.
By Mike Odiakose, Abuja
Immediate past governor of Kogi State, Yahaya Bello will spend the 2024 Christmas and 2025 New Year days in Kuje prison, Abuja, following refusal of his bail application by the Federal Capital Territory High Court.
Justice Maryann Anenih yesterday adjourned the case until Jan.
29, Feb. 25, and Feb. 27, 2025 for the continuation of the hearing.The former governor is standing trial, along with two others, in an N110 billion money laundering charge brought against him by the Economic and Financial Crimes Commission (EFCC).
Justice Anenih had refused to grant a bail application filed by Bello, saying it was filed prematurely.
The judge admitted Umar Oricha and Abdulsalam Hudu, to bail in the sum of N 300 million each with two sureties.
Justice Anenih, while delivering a ruling said, having been filed when Bello was neither in custody nor before the court, the instant application was incompetent.
“Consequently, the instant application having been filed prematurely is hereby refused,” she said.
Recalling the arguments before the court on the bail application, the judge had said, “before the court is a motion on notice, dated and filed on Nov. 22.
“The 1st Defendant seeks an order of this honourable court admitting him to bail pending the hearing and determination of the charge.
“That he became aware of the instant charge through the public summons. That he is a two-term governor of Kogi State. That if released on bail, he would not interfere with the witnesses and not jump bail.”
She said the Defendant’s Counsel, JB Daudu, SAN, had told the court that he had submitted sufficient facts to grant the bail.
He urged the court to exercise its discretion judicially and judiciously to grant the bail.
Opposing the bail application, the Prosecution Counsel, Kemi Pinheiro, SAN, argued that the instant application was grossly incompetent, having been filed before arraignment.
He said it ought to be filed after arraignment but the 1st Defendant’s Counsel disagreed, saying there was no authority
“That says that an application can only be filed when it is ripe for hearing.”
Justice Anenih held that the instant application for bail showed that it was filed several days after the 1st defendant was taken into custody.”
Citing the ACJA, the judge said the provision provided that an application for bail could be made when a defendant had been arrested, detained, arraigned or brought before the court.
Bello had filed an application for his bail on November 22 but was taken into custody on November 26 and arraigned on Nov. 27.
From Jude Dangwam, Jos
Conference of Autochthonous Ethnic Nationalities Community Development Association (CONAECDA) has called on the federal government to intensify efforts in the resettlement of displaced persons in their ancestral homes.
The organization made this call at the end of its conference held in Jos, the Plateau State Capital weekend.
Thirty resolutions were passed covering security, economy, politics, governance, culture, languages, human rights and indigenous peoples’ rights among others.
The Conference President, Samuel Achie and Secretary Suleman Sukukum in a communique noted that the conference received and discussed reports from communities based on which resolutions were reached on securing, reconstruction, rehabilitation and returning communities displaced by violence across the Middle Belt.
“After considering the reports from communities displaced by violent conflicts, conference resolved, and called on government to focus on providing security to deter further displacements.
“Call on government to provide security to enable communities to return. Government and donor partners should assist in reconstructing and returning displaced communities,” the communique stated.
The GOC 3 Armoured Division Nigeria Army represented by Lt Col Abdullahi Mohammed said the Nigerian Army is committed to working closely with communities to achieve a crime-free society, urging communities to support them with credible information.
“Security is a collective effort, and we cannot do it alone, the community plays a crucial role in ensuring safety.
“We urge everyone here not to shield or protect individuals involved in criminal activities. Transparency and collaboration, together, with maximum cooperation, we can achieve peace, security, and prosperity for our society,” the GOC stated.
The National Coordinator of CONECDA, Dr. Zuwaghu Bonat in his address at the gathering noted that the theme of this year’s program, Returning, Resettling, and Rehabilitating Displaced Communities, was chosen as a wakeup call on the federal government.
He maintained that the organization is aware that President Bola Tinubu has expressed a commitment to ensuring that displaced communities return to their ancestral lands.
He said similarly, some state governments, including Plateau State, have set up committees to address the lingering matter.
The coordinator however cautioned, “It is critical that we avoid generalizations or profiling. For instance, Not all Muslims are involved in terrorism. The overwhelming majority of Muslims in Nigeria are peaceful and reject extremist ideologies.
“We also know that some terrorists exploit religion to mobilize support or rationalize their actions. However, their atrocities – slaughtering women, cutting open pregnant mothers, and killing children show a profound disregard for humanity and God. Normal human beings would not commit such acts.
“We must also be cautious about lumping banditry with terrorism. While statistics indicate that many bandits and kidnappers may share similar ethnic backgrounds, kidnapping has now evolved into a profit-driven enterprise. This distinction is vital to address the root causes effectively,” he stated.
The Governor of Plateau State, Caleb Mutfwang represented by his Senior Special Assistant (SSA) on Middle Belt Nationalities, Hon Daniel Kwada noted that the conference was apt to addressed the various underlying issues bedeviling the region and its people.
“We in the Middle Belt have long been standing at the crossroads of Nigeria’s complex history. Despite our tireless efforts to stabilize this nation, we have faced immense challenges, including underdevelopment, security issues, and marginalization.
“Often, we are unfairly maligned, but gatherings like this offer a chance to change the narrative.
“Such conferences set the tone for better discussions. They allow us to drive processes that bring development, ensure security, and elevate our people to greater heights,” Mutfwang noted.
Securities and Exchange Commission (SEC) has called on banks to reinforce their corporate governance principles and risk management frameworks to boost investor confidence during the ongoing recapitalisation exercise.
Dr Emomotimi Agama, Director-General, SEC, said this at the yearly workshop of the Capital Market Correspondents Association of Nigeria (CAMCAN) held in Lagos.
The theme of the workshop is: “Recapitalisation: Bridging the Gap between Investors and Issuers in the Nigerian Capital Market”.
Agama, represented by the Divisional Head of Legal and Enforcement at the SEC, Mr John Achile, stated that the 2024–2026 banking sector recapitalisation framework offers clear guidance for issuers while prioritising the protection of investors’ interests
He restated the commission’s commitment towards ensuring transparency and efficiency in the recapitalisation process.
The director-general stated that the key to bridging the gap between issuers and investors remained the harnessing of innovation for inclusive growth.
In view of this, Agama said, “SEC, through the aid of digital platform, is exploring the integration of blockchain technology for secure and transparent transaction processing to redefine trust in the market.”
He added that the oversubscription of most recapitalisation offers in 2024 reflects strong investor confidence.
To sustain this momentum, the director-general said that SEC had intensified efforts to enhance disclosure standards and corporate governance practices.
According to him, expanding financial literacy campaigns and collaborating with fintech companies to provide low-entry investment options will democratise access to the capital market.
He assured stakeholders of the commission’s steadfastness in achieving its mission of creating an enabling environment for seamless and transparent capital formation.
“Our efforts are anchored on providing issuers with clear guidelines and maintaining open lines of communication with all market stakeholders, reducing bureaucratic bottlenecks through digitalisation.
“We also ensure timely review and approval of applications, and enhancing regulatory oversight to protect investors while promoting market integrity,” he added.
Agama listed constraints to the exercise to include: addressing market volatility, systemic risks, limited retail participation as well as combating skepticism among investors who demand greater transparency and accountability.
He said: “We are equally presented with opportunities which include leveraging technology to deepen financial inclusion and enhance market liquidity.
“It also involves developing innovative financial products, such as green bonds and sukuk, to attract diverse investor segments.
“The success of recapitalisation efforts depends on collaboration among regulators, issuers, and investors.”
Speaking on market infrastructure at the panel session, Achile said SEC provides oversight to every operations in the market, ranging from technology innovations to market.
He stated that the commission is committed to transparency and being mindful of the benefits and risks associated with technology adoption.
Achile noted that SEC does due diligence to all the innovative ideas that comes into the market to ensure adequate compliance with the requirements.
On the rising unclaimed dividend figure, Achile blamed the inability of investors to comply with regulatory requirements and information gap.
He noted that SEC had done everything within its powers to ensure that investors receive their dividend at the appropriate time.
He, however, assured that the commission would continue to strengthen its dual role of market regulation and investor protection to boost confidence in the market.
In her welcome address, the Chairman of CAMCAN, Mrs Chinyere Joel-Nwokeoma, said banks’ recapitalisation is not just a regulatory requirement, but an opportunity to rebuild trust, strengthen the capital market, and drive sustainable growth.
Joel-Nwokeoma stated that the recent recapitalisation in the banking sector had brought to the fore the need for a more robust and inclusive capital market.
She added that as banks seek to strengthen their balance sheets and improve their capital adequacy ratios, it is imperative to create an environment that fosters trust, transparency, and cooperation between investors and issuers.
The chairman called for collaboration to bridge the gap between investors and issuers to create a more inclusive and vibrant Nigerian capital market.She said: “we must work together to strengthen corporate governance and risk management practices in banks, enhance disclosure and transparency requirements for issuers.” NAN
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