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Reps want punishment for DisCos for poor electricity supply

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The House of Representatives has urged the Nigerian Electricity Regulatory Commission (NERC) to compel Distribution Companies (DisCos) to discontinue alleged extortive practice of estimated/arbitrary billing with immediate effect.

The legislators recommended that the companies be reprimanded for the abysmal provisioning of services to Nigerian electricity consumers.

The resolution was sequel to a unanimous adoption of a motion by Rep. Afuape Moruf (APC-Ogun) at plenary on Tuesday.

Moving the motion earlier, Moruf said that the Electricity Act, 2023, prescribed a comprehensive and institutional framework to guide the operation of a privatised, contract, and rule-based electricity market.

The Rep said it was within the ambit of which every participant in the Nigerian Electricity Supply Industry (NESI) must operate.

He said the NERC as the NESI regulator, had among other obligations to ensure adequate supply of electricity to consumers.

According to him, it is expected to ensure that prices charged are fair to consumers, though sufficient to allow the finances of Disco’s activities, as well as enable them to make a reasonable profit for efficient operation.

Moruf said that 11 Electricity DisCos were entities established by the Electric Power Sector Reform Act, 2005, to supply electricity to power consumers with obligations to the respective operational areas.

He said the companies had the statutory duties to provide for power transmission facilities and other ancillary services to ensure reliability and support the transmission of electricity from generation sites to consumers.

“Concerned that the distribution companies raked in a whooping N247.33 billion in the first quarter of 2023 as against N232.32 billion generated in fourth quarter of 2022, representing a rise by 20.81 per cent compared to N204.74 billion generated first Quarter of 2022 (year-on-year consideration)

“Whereas, electricity supply declined from 5,956 (Gwh) in first Quarter of 2022 to 5,852 (Gwh) first Quarter of 2023 (year-on-year consideration), despite the increase in earnings.

“Concerned that the distribution companies have demonstrated unfaithfulness toward the social contract with Nigerians, as enshrined and enhanced by the transitional effect of the Electric Power Reform Act, 2005 to the Electricity Act, 2023, having been inefficient in their services.

“They have condemnable attitudes toward expected investments, abdicating their statutory responsibilities for communities, private and other public entities, despite their humongous earnings, as extracted from the Q1 2023 report of the National Bureau of Statistics on a performance review of the 11 distribution companies,” he said.

He expressed worry that the NERC had watched helplessly while communities, individuals, and corporate organisations assumed the responsibilities of providing electricity transmission facilities (meters, cables and transformers) where they were either not available or repaired, where the same were faulty.

The house urged the NERC to put in place an effective metering plan, which assured consumers of fair billing.

The lawmaker tasked NERC to invoke relevant provisions of the law and other extant agreements to penalise DisCos from exploiting and abusing the rights of consumers.

The green chamber charged NERC to evolve a methodology along with the distribution companies to compensate communities, individuals, and other private and public entities for their investments in the distribution network.

In his ruling, the Speaker, Rep. Tajudeen Abbas mandated the Committee on Power when constituted, to interface with the NERC and the distribution companies (DisCos) to work and resolve limitations to provide excellent service delivery to Nigerians.

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Job Losses, Factory Closures Loom As Unsold Goods Pile Up — MAN

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AGAINST the backdrop of sustained pressure in the foreign exchange market and high cost of production, the Manufacturers Association of Nigeria, MAN has indicated that inventory of unsold goods is escalating to levels now threatening the existence of companies operating in the production sector of the economy with attendant job losses.

Findings show that as of the weekend the foreign exchange market had recorded over 254 per cent plunge in the value of the naira since flotation of the currency by the Central Bank of Nigeria (CBN) in June 2023.

Recall that the naira traded for N471 per dollar in the official I&E market on June 13, 2023 before the floatation of the currency, but exchanged for N1,665.50 to a dollar as at February 23, 2024 on the Nigerian Foreign Exchange Market (NAFEM), indicating a depreciation of more than 253.6 per cent over the eight-month period. The forex crisis is also stoking inflation, and coupled with high energy costs, purchasing power has continued plummet, stifling demand for goods.

Speaking on the impact of this development on the manufacturing sector, Director General, MAN, Segun Ajayi-Kadir, said: “There are reports that across the board, many warehouses and plants of many manufacturing firms are stockpiled with unsold goods manufactured last year. “The development is as a result of the devastating effects of the exchange rate crisis, inflation, fake and sub-standard goods, smuggling and other macro-economics challenges.”

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CBN Lifts Ban On BDCs, Introduces New Operational Mechanism

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In a major development aimed at financial stability and strengthening the naira, the Central Bank of Nigeria (CBN) plans to resume its weekly intervention in the country’s foreign exchange (FX) market through the Bureau de Change (BDC) operators.

In 2021, the central bank, in a bid to achieve its mandate of safeguarding the value of the local currency, ensuring financial system stability, and shoring up external reserves, announced the immediate discontinuance of foreign currency sales to Bureau de Change (BDC) operators in the country.

However, the resumed intervention, which would reportedly commence today for funding as well as Tuesday for collection, will see the apex bank inject FX into the subsector in a bid to rescue the naira from further depreciation against major currencies, particularly the US Dollar. The collection will be at designated CBN branches in Lagos, Abuja, Kano, and Awka, while details of the naira accounts to be credited for funding bidding will also be made available today.

CBN is also expected to publish the list of eligible BDCs to benefit from its funding using certain compliance criteria.National Executive Council of Association of Bureau De Change Operators of Nigeria (ABCON) hinted on the latest developments through a memo to its members over the weekend.

The association also warned members that it will no longer be business as usual under the new supervisory regime of the central bank, as any infringement or infraction would result in outright revocation of license and prosecution.

ABCON said through the association’s various engagements with the central bank, in conjunction with ABCON’s strategic partners, CBN had agreed to its request, under the bank’s supervision, to inject liquidity into the market through a weekly intervention beginning today.

CBN assured ABCON that the new circular on the Revised Regulatory and Supervisory Guidelines to BDCs, which was introduced over the weekend, was only a draft exposure that required the association’s inputs before the release of the final guidelines by the apex bank.

To that effect, the letters of the guidelines were not cast in stone, the association’s leadership told its members, who had been worried over the sweeping reforms in the document, which, among other things, prescribed N2 billion and N500 million minimum capital for national and state BDCs, respectively.

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