- Electricity Consumers Groan as Meter Rollout Faces Fresh Delay
Electricity consumers in the country have expressed disappointment as meter rollout under the Meter Asset Provider scheme failed to kick off on May 1, more than one year after the initiative was introduced by the Nigerian Electricity Regulatory Commission.
The MAP Regulation was unveiled in March last year, with the aim of fast-tracking the roll-out of meters through the engagement of third-party investors for the financing, procurement, supply, installation and maintenance of electricity meters.
It introduced a new set of service providers in the power sector, called meter asset providers, to assist the distribution companies in bridging the huge metering gap in the Nigerian electricity supply industry.
According to the 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.
But the procurement process for the MAPs was delayed, with the regulator saying in late March that it was reviewing the MAP procurement reports.
NERC said last month(April) that permits had been issued to the MAPs engaged by eight out of the 11 Discos, adding that the rollout of meters would commence no later than May 1, 2019.
The Discos are Abuja Electricity Distribution Company Plc, Jos Electricity Distribution Company Plc, Ikeja Electricity Distribution Company, Benin Electricity Distribution Company, Port Harcourt Electricity Distribution Plc, Yola Electricity Distribution Company Plc, Enugu Electricity Distribution Company Plc, and Ibadan Electricity Distribution Company Plc.
“The meter rollout was supposed to start on May 1, 2019. But it has not. There have been a lot of complaints from our members across the country. They complained that even the meters that were paid for before now have not been given to them,” the President, Electricity Consumers Association of Nigeria, Mr Chijioke James, said on Wednesday.
He said, “One week into the deadline given by the regulator, the situation seems not to have changed. So, it behoves on the regulator to ensure that all stakeholders comply with that regulation. It ought not just to bark, but also bite; that way, we can have sanity in the sector.
“Our take is that the regulator should wake up and hold the power distributors accountable to the consumers. Consumers are beginning to lose confidence in both the regulator and the Discos. Not until we see improved services, we are not going to take the regular and the Discos seriously.”
James noted that the consumers had over the years expressed readiness to pay for meters.
He said, “If you look at the legal framework, the burden of meter provision is on the Discos. We want to warn the Discos to stop forthwith the issuance of estimated bills. We will no longer take estimated billing.”
The Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors, Sunday Oduntan, told our correspondent that the Discos would continue to collaborate with MAPs to ensure the rollout of meters to customers.
He said, “The Discos are in support of MAP. Ask the meter asset providers; they will confirm to you that is not as if the Discos are the ones throwing them down and we are not interested in pointing accusing fingers at anybody.
“We are happy about anything that will facilitate the provision of meters to people. I know Nigerians want meters as quickly as possible.”
Attempts to get comment from NERC on the matter were unsuccessful as the commission’s Head, Public Affairs Department, Dr Usman Arabi, had yet to respond to phone calls as of the time of filing the report. He said in a text message that he was in a meeting in Lagos.
The Chairman/Chief Executive Officer, Nigerian Electricity Regulatory Commission, Prof James Momoh, said recently that since the privatisation of the power sector, there had been a constant decline in the provision of meters to existing customers by the Discos while new customers had been added steadily to their networks, contributing to a significant metering gap.
He said investigations by the commission revealed that a total number of 5,172,979 electricity customers were registered as of May 2012, but only 2,893,701 had meters.
He noted that the Discos signed performance agreements with the Bureau for Public Enterprises in 2013, and were expected to provide 1,640,000 meters annually over the next five years.
NERC, in its latest quarterly report, 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 meters as of the end of the third quarter of 2018.
With the MAP regulation becoming effective on April 3, 2018, the Discos were expected to, within 120 days from the effective date, engaged the services of MAPs towards the achievement of their three-year metering targets prescribed by NERC.
NERC noted that the deadline was fixed for July 31, 2018, but was extended to November 30, 2018 to engender more competition among potential MAPs, thus providing better value for consumers.
“Several of the Discos experienced slippage in the timeline stipulated by the commission and this infraction is being handled in line with the enforcement regulations of the commission,” it added.
West African Consumer Sentiment Reflects Global Uncertainty
Ghanaian Consumer Confidence Declines by 15 Points
Lagos, 7 July 2020 – Against the backdrop of the unprecedented COVID-19 pandemic, West African consumer sentiment has experienced a sharp drop in the Nielsen Consumer Confidence Index (CCI) for Quarter 2, 2020. Ghana’s figures show a substantial decrease of 15 points to 104, while Nigeria’s CCI has decreased by 14 points to 108.
Looking at Ghana’s performance, Yannick Nkembe, Market Lead for Nielsen West Africa Expanded Market, comments; “The latest consumer sentiments reflect the market reality. With the global pandemic affecting the economy and causing general uncertainty all around, consumers have readjusted their confidence levels and are also more cautious with their spend.”
Ghanaians have significantly dropped their outlook around their job prospects, with less than half (45%) saying they will be good or excellent in the next 12 months – a 16 point decrease from the previous quarter. In terms of the state of their personal finances over the next 12 months, 60% say they are excellent or good, again a substantial 16 point drop from the previous quarter.
Ghanaians propensity to purchase has also seen a considerable decrease quarter on quarter, with the number of those who think now is a good or excellent time to purchase what they want or need drop from 52% to 33% in the second quarter.
Only 43% of Ghanaians say they have spare cash, down 13 points from the previous quarter. Once they meet their essential living expenses, the highest number of consumers (74%) put their spare cash into savings, followed by 73% on home improvements/decorating and 56% who would invest in stocks and mutual funds. One of the most significant drops in discretionary spending is on holidays down from 58% to 27% – a clear indicator of consumers’ mindset shift away from non-essential services and their desire to avoid unnecessary travel.
When asked whether they had changed their spending to save on household expenses compared to this time last year, 75% said yes, up seven points from the previous quarter. To reduce expenses, 53% said they spent less on new clothes, 52% on out of home entertainment, with the same figure deferring on the replacement of major household items.
When looking at the real-life factors that are affecting their outlook, the top consumer concerns over the next twelve months were increasing food prices (29%), followed by work/life balance (23%) and their children’s education (22%). Nkembe comments; “Ghana has previously experienced strong business prospects and with the relatively earlier easing of restrictions to stimulate its economy, recovery in Ghana is likely to rebound sooner. We expect consumers to revert to previous consumption behaviours, although some of their attitudes will have fundamentally or permanently changed post the pandemic.”
Subdued sentiment in Nigeria
In tandem with the rest of the world, Nigeria’s CCI figure dropped by 14 points. Commenting on the reasons for this, Nielsen Nigeria MD Ged Nooy says; “As Africa’s largest economy and the largest exporter of oil, Nigeria’s economy was already under immense pressure before the COVID-19 lockdown due to the collapse in international oil prices. Based on the additional economic pressure as a result of the COVID-19 pandemic, Nigeria, therefore, instituted a fairly early easing of its 5-week lockdown in early May due to the adverse financial effects on its economy and population.”
Looking at the consumer picture during this time (Quarter 2, 2020) Nigerian job prospects declined with less than half viewing them as excellent or good, a 14 point drop from the previous quarter. Nigerians’ sentiment around the state of their personal finances also showed a decline with 59% who think they will be excellent or good over the next year, having decreased 19 points from the previous quarter. Immediate-spending intentions also declined, with only a third of the respondents saying “now is a good or excellent time to purchase” what they want or need, a 14 point drop from the previous quarter.
In terms of whether Nigerians have spare cash to spend, 32% said yes, versus 50% in the previous quarter. When we look at Nigerians spending priorities, once they have met their essential living expenses, 81% said they would put their spare cash into savings, 73% said home improvements and decorating and 66% would invest in shares/mutual funds.
Seventy-six per cent of Nigerians said they had changed their spending to save on household expenses compared to this time last year. To reduce expenses, 67% said they had delayed the replacement of major household items (a 10 point increase on the previous quarter). Sixty-four per cent said they would spend less on new clothes and 56% said less out of home entertainment – both of which are understandable given ongoing restricted living patterns.
In the next 12 months, Nigerians said their top concern would be attaining a work/life balance (31%), which has seen the biggest increase of eight points compared to the previous quarter. This is followed by increasing food prices (23%) and concerns over the economy (19%).
Elaborating on these results, Nooy says; “Economic recovery has been sluggish and will remain severely constricted due to the oil price crash amidst and beyond the pandemic. For Nigeria’s manufacturing and retail sectors to rebound will require a sharp focus, as trade opportunities and execution remains severely constrained, having further deteriorated during the partially restricted living period.”
Domestic Airlines Increase Fares Ahead of Flight Resumption
Domestic Airlines Raise Ticket Fares Ahead of Flight Resumption
The nation’s airline companies raised ticket fares to compensate for lack of bailout from the Federal Government and about 100 percent increase in service charges.
Last month, the Federal Government directed all domestic airlines to begin flight operations on July 8th following the March 30th suspension of all operations.
However, checks by our correspondent showed that domestic airlines have increased fares on all classes of tickets from Lagos to Abuja.
For a Dana Air flight from Lagos to Abuja, Economy Discount tickets are sold for N30,000 for a one-way ticket while the Economy Flexible ticket goes for N70,500.
Similarly, Air Peace Economy-Flexi Domestic Plan ticket goes for N33,001 for a one-way flight from Lagos to Abuja. The company sold its business class ticket for N80,000.
While potential passengers of Azman Air would need to part with N33,000 for an economy ticket from Lagos-Abuja. For a business class ticket, the company charges N60,000.
Arik Air, however, charges the lowest for economy plan. Passengers are required to pay just N29,189 for economy tickets and N71,532 for business tickets for a one-way trip from Lagos to Abuja.
Allen Onyema, the Chief Executive Officer, Air Peace, who was present at the simulation exercise conducted two weeks ago, had called for a bailout to help the sector protect jobs.
He said “Palliatives, bailout, rollout, intervention funds or whatever we call it is necessary. All over the world, the government is giving palliatives, bailout funds to their airlines.
“Even the strongest of airlines all over the world asked for this. What bothers us more in Air Peace is the retention of the workforce.
“COVID-19 has brought about immense loss of jobs worldwide. We must begin to think of ways of curbing the losses in Nigeria.”
However, it doesn’t seem like the Federal Government that is presently battling possible recession is willing to bail out airlines whose services are mainly required by high net worth individuals. This further highlighted why the service charges on flight tickets were raised by 100 percent.
The average cost of one way air flight from Lagos to Abuja was between N15,000 to N40,000 before the lockdown.
IATA Says Nigerian Airlines Loses $2.09bn in April and June
Airlines in Nigeria Loses $2.09 Billion in April and June
The International Air Transport Association (IATA) has estimated that Nigerian airlines lost about $2.09 billion in the month of April and June due to COVID-19 lockdown.
In its report titled ‘Quarantine measures threaten aviation restart in Africa and the Middle East,’ IATA stated that the aviation sector in Africa and the Middle East was the worst-hit.
According to the report, the aviation sector in the two regions provides over 8.6 million direct and indirect jobs.
While the report did not provide data for the month of May, it stated that the number of Nigerian passengers declined by 4.7 million in April and 5.32 million in June when compared with the same period of 2019.
Similarly, the report said 125,400 jobs were at risk in April and 139,500 jobs were at risk in the month of June.
Muhammad Albakri, the Regional Vice President for Africa and the Middle East, IATA, said governments in Africa and the Middle East must devise alternative methods to the current quarantine measures in place, saying the two regions have the highest number of government-imposed quarantine measures on arriving passengers.
He said, “It is critical that AME governments implement alternatives to quarantine measures. AME has the highest number of countries in the world with government-imposed quarantine measures on arriving passengers.
“The region is effectively in complete lockdown with the travel and tourism sector shuttered. This is detrimental in a region where 8.6 million people depend on aviation for their livelihoods.”
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