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Discos Face Sanctions as Metering Scheme Suffers Delay

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Electricity Pole
  • Discos Face Sanctions as Metering Scheme Suffers Delay

Electricity consumers have yet to feel the impact of a scheme introduced last year to expedite the deployment of meters as its implementation has been delayed, ’FEMI ASU writes

When the Nigerian Electricity Regulatory Commission unveiled the Meter Asset Provider Regulation in March last year, electricity consumers who were being subjected to estimated billing by power distribution companies hailed the initiative.

The MAP regulation, which introduced a new set of service providers in the power sector called meter asset providers, was designed to fast-track the roll-out of meters through the engagement of third-party investors for the financing, procurement, supply, installation and maintenance of electricity meters.

The Discos were required to commence the procurement process of engaging meter asset providers to serve their service areas in accordance with an approved roll-out plan.

With the regulation becoming effective on April 3, 2018, the Discos were expected to, within 120 days from the effective date, engage the services of MAPs towards the achievement of their three-year metering targets prescribed by NERC.

But more than nine months after its introduction, the impact of the metering initiative has not yet been felt by consumers as the process of procuring MAPs has not been concluded by the Discos.

The regulator, which only announced on May 23 that it had cleared 22 firms intending to participate in the meter procurement process to be conducted by the Discos, had to extend the deadline for the procurement to October 31.

According to the MAP regulation, the distribution licensees (Discos) and the MAPs shall enter into a metering service agreement, which shall provide for the number of meters to be installed in the distribution licensee’s network over an agreed period and the recovery of the cost of meter asset plus a reasonable return over a period of 10 years, among others.

NERC said the number of firms seeking to become MAPs rose to 115 as of November 22 from the 101 that were granted ‘No Objection’ as of October 17.

The President, Electricity Consumers Association of Nigeria, Mr Chijioke James, said in a telephone interview with our correspondent that the delay in the procurement of MAPs “automatically has continued to foist hardship on the consumers.”

He said, “I think the delay may be intentional. Maybe some people within the Discos are sabotaging the MAP scheme, because I see no reason why you want to collect your money and the instrument that you need to collect the money is lacking.

“If you say you are a distribution company, your primary tool of operation is the meter. How can you distribute and you are finding it difficult to invest in what you will use to collect revenue to defray your costs? The system is such that the consumers are at the receiving end; that is our challenge.”

NERC, in its latest quarterly report released this month, noted that the metering gap for customers still remained a key challenge facing the Nigerian electricity supply industry.

It said out of the 8,310,408 registered electricity customers, only 3,704,302 (about 45 per cent) had been metered as of the end of the third quarter of 2018.

“The majority of customers (55 per cent) are still on estimated billing, thus contributing to customer apathy towards payment for electricity,” the commission said.

It said it had intensified its monitoring of Discos’ implementation of and compliance with the provisions of the MAP regulation in order to fast-track meter roll-out and close the metering gap within three years.

“NERC is not doing enough as the regulator. We have a situation where the consumers hardly get justice. If NERC is serious about protecting the consumers and has put in place a guideline regarding when consumers must be metered, the Discos should be sanctioned if they fail to comply with that guideline,” James said.

Last week, a bill seeking to amend the Electric Power Sector Reform Act, prohibit and criminalise estimated billing passed the second reading at the House of Representatives.

“What informed that bill was the unjust and exorbitant estimated billing that consumers are made to bear,” the ECAN president noted.

The Deputy Director, Consumer Affairs at NERC, Mr Shittu Shaibu, told our correspondent on Friday that the procurement process was being finalised, saying, “In fact, we invited every Disco to come and give us their update because, by January 1, we expected that at least some innovations would take place after the completion of the MAP procurement process.

“All of the Discos have come to see the commission and we are hoping that before the end of this month their reports will be in and we will definitely make the scheme take off. Ideally, by the end of October, the MAP process was supposed to have been concluded after the extension by the commission, so that as from November 1, we expected to have got some reports for the commission to review and give permits to the Discos.”

According to him, some of the Discos have submitted their reports while others are finalising theirs.

Asked what was responsible for the delay, Shaibu said, “There were issues of comparability and interoperability. Both the bidders and the distribution companies had some slight issues in terms of the procurement process, especially the technical evaluation.

“It will not be fair to bring meters that will not be compatible with the billing system, considering the fact that they will not be there for a long time. Those are some of the reasons the Discos are putting forward for the delay. All the same, the commission is on top of the issue and ensuring that the scheme takes off as quickly as possible, because Nigerians are already clamouring and the commission has already put out a paper to cap their estimation.”

According to him, the commission will ensure that the Discos don’t do anything that will jeopardise the MAP initiative.

Shaibu said, “There are a few hitches because this is the first time something like this is being done. The Discos have shown positive signs of wanting to do it. Moreover, it is not an issue of whether they want to do it or not; it is compulsory that they do it because if Nigerians are to be metered the way we want it, there has to be a way out and this MAP is an avenue by which funds will come towards the procurement of meters.

“For now, all the Discos are already guilty of delay and usually when you have delays in the implementation of anything, the commission, of course, applies sanctions, and this one will not be an exception.”

Last Friday, the Minister of Power, Works and Housing, Mr Babatunde Fashola, said the MAP policy would ease the financial pressure facing Discos as new investors would come into the metering space.

“Just in the way the Gencos and Discos were licensed, we are going to license them too as meter asset providers in the value chain of power supply.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

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As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

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Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

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Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

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