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Tariff Hike Looms For Band A Feeders As Monthly Power Subsidy Hits N181bn

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Electricity customers on Band A feeders may face a tariff increase due to the rising electricity tariff shortfall, or subsidy.

The Federal Government’s electricity subsidy rose from N102.30bn in May to N181.63bn in September.

In April, the Nigerian Electricity Regulatory Commission removed subsidies for Band A feeders, which had a N140.7bn subsidy.

This change raised tariffs to N225/kWh for Band A customers, who receive at least 20 hours of electricity daily.

The decision sparked outrage among Nigerians, including labour unions and education and health institutions, whose electricity bills tripled.

When the subsidy dropped to N102.30bn in May, the government lowered the Band A tariff to N206.80/kWh. However, the tariff increased to N209/kWh in July as the subsidy rose to N158bn in June.

According to data released by the NERC, the subsidy rose to N163.87bn in July, N173.88bn in August, and N181.63bn in September, fuelling speculations that there may be another tariff increase in the October Multi-Year Tariff Order unless the cost of power generation drops.

It was gathered that the foreign exchange crisis has been the major driver of the electricity subsidy. The NERC put the dollar exchange rate at N1,494.1 in July; 1,564.3 in August; and N1601.5 in September.

According to the regulator, the dollar rate and inflation are the determinants of the cost of power production. In the MYTO order to all the power distribution companies for September, the NERC said, further to Section 23 of the MYTO-2024, the supplementary orders are to reflect the changes in the pass-through indices outside the control of licensees including inflation rates, naira/dollar exchange rate, available generation capacity and gas price for the determination of cost-reflective tariffs.

The naira to the US dollar exchange rate of N1,601.50 to a dollar was adopted for September.

The Nigerian inflation rate of 33.40 per cent for July 2024 as published by the National Bureau of Statistics was applied to revise the Nigerian inflation rate projection for 2024 while the US inflation rate of 2.90 percent for July 2024 was applied to revise the US Inflation rate projection for 2024.

As of September, the NERC maintains the benchmark gas-to-power price of $2.42/MMBTU based on the established benchmark price of gas-to-power by the Nigerian Midstream and Downstream Petroleum Regulatory Authority in line with Section 167 of the Petroleum Industry Act 2021.

The cost of power generation is also being impacted by contracted gas supply and transportation prices outside the domestic gas delivery obligation quantities based on effective gas sale agreements approved by the commission.

When the commission reduced the Band A tariff to N206/KWh in May, its spokesperson, Usman Arabi, said that the reduction was due to the naira appreciation in the foreign exchange market.

It was observed that despite the rise in the cost of power generation, the Federal Government has yet to approve another tariff hike, perhaps due to the current economic hardship in the country, especially with the rise in the cost of premium motor spirit otherwise known as petrol.

For example, in the Abuja Electricity Distribution Company, the commission said the energy delivered was 611 megawatt-hours per hour in April.

The same was delivered from May to September. While the generation cost was N103.9 per kilowatt-hour in April, it dropped to N87.33/KWh in May and rose to N113.69/KWh in September.

The AEDC had a transmission and admin cost of N9.1/kWh in April, N8.9/kWh in May and N9.8/kWh in June. It is N10.4 in September.

It was gathered from the NERC data that the end-user cost-reflective tariff in AEDC was N185/kWh in July; N192.2/kWh in August and N195.5/kWh in September.

Similarly, the end-user allowed tariff was N117.31/kWh in the three months, indicating that despite the rise in the cost of power generation, the NERC pegged the allowed tariffs at the same rate in July, August, and September.

However, it was gathered that the Discos are already complaining over the non-cost-reflective tariffs.

Some of them are currently refusing to off-take electricity allocated to them from the grid, demanding that subsidies be removed in all bands.

A top official of one of the Discos had said that the power companies were finding it difficult to pick the extra energy produced by generation companies because they were not happy with the tariff on other bands apart from Band A.

“As it is now, we are operating at a loss. Yes, they supply more power but this problem could be solved with improved tariff for the other bands and more meter penetration to recover the cost,” the Disco official, who pleaded not to be named due to lack of authorisation to speak on the matter, said.

The Minister of Power, Adebayo Adelabu, recently decried the rejection of power by electricity distribution companies, describing it as regrettable.

According to the minister, generation peaked above 5,000 megawatts recently, but “unfortunately, it had to be ramped down by 1,400MW due to the inability of the Discos to pick the supply.”

Adelabu lamented the development, saying “This is really regrettable considering that the government is on course to increase generation to 6,000MW by the end of the year.”

Adelabu called on power distribution companies to take more energy to prevent grid collapse as the grid’s frequency drops when power is produced and not picked by the Discos.

 

Credit: The Punch

BIG STORY

Reps Give President Tinubu 72 Hours To Unfreeze Accounts Of Social Investment Programmes

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The House of Representatives has called on President Bola Tinubu to direct Wale Edun, the Minister of Finance, to unfreeze all accounts of the National Social Investment Programmes Agency (NSIPA) within 72 hours.

The resolution was passed during plenary on Tuesday, following the adoption of a motion sponsored by Benjamin Kalu, Deputy Speaker, along with 20 other lawmakers.

The programs under the Social Investment Programmes (SIP) include N-Power, Conditional Cash Transfer (CCT), the Government Enterprise and Empowerment Programme, and the Home-Grown School Feeding Initiative.

The parliament emphasized that unfreezing NSIPA’s accounts would ensure the “smooth” recommencement of all the programs.

Additionally, the House called on the President to ensure the release of funds to NSIPA for the payment of outstanding stipends owed to 395,731 N-Power beneficiaries across the country “without further delay.”

  • BACKGROUND

In 2023, former President Muhammadu Buhari enacted a law to establish the NSIP, an agency that has been embroiled in corruption since the beginning of the year.

On January 2, President Tinubu suspended Halima Shehu as the Chief Executive Officer (CEO) of NSIPA over alleged financial mismanagement.

On January 8, the President also suspended Betta Edu, the Minister of Humanitarian Affairs and Poverty Alleviation, the ministry overseeing NSIPA.

On January 12, the President suspended all programs administered by NSIPA as part of an investigation into alleged mismanagement.

On March 13, the House of Representatives urged the federal government to resume the implementation of the suspended social investment initiatives.

The Senate is currently considering a bill to place NSIPA under the supervision of the presidency. Tinubu has since appointed Badamasi Lawal to replace Shehu.

  • THE MOTION

In presenting the motion, Kalu highlighted that, despite the significance of the social investment programs in poverty alleviation, youth empowerment, and economic inclusivity in Nigeria, the agency’s effectiveness has been hampered by administrative challenges, lack of funding, and frozen accounts.

“The smooth operations of the programmes and the fulfilment of the mandate of NSIPA are hindered due to the suspension/freezing of the accounts of the agency and other administrative bottlenecks, which has remained in force even more than 3 months after the President reconstituted the new management of NSIPA,” Kalu stated.

The Deputy Speaker noted that the frozen accounts contradict Tinubu’s mandate on poverty alleviation, undermining public confidence and causing “administrative paralysis in fighting poverty.”

“As a result of the suspension of accounts of NSIPA, the N-Power programme has been so negatively affected that 395,731 beneficiaries are owed outstanding stipends to the tune of N81,315,440,000 — a fund already captured under the 2023 and 2024 amended Appropriation Acts, which will lapse by the year ending 31st December, 2024,” Kalu added.

He emphasized that restoring NSIPA’s accounts aligns with the President’s vision and ensures that poverty alleviation efforts remain effective, efficient, and impactful, urging swift action to resolve the issue to maintain progress toward the administration’s poverty eradication goals.

The parliament also called for the reopening of all NSIPA warehouses nationwide.

The motion was unanimously adopted following a voice vote chaired by Tajudeen Abbas, the Speaker of the House.

The House agreed to transmit the resolution to the Senate for concurrence.

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BIG STORY

WIMBIZ 2024: ST. Ives Hospital Partners Host To Prioritize Women Healthcare [PHOTOS]

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The 2024 edition of the Women in Business and Public Service, WIMBIZ has seen one of Nigeria’s leading hospital brands, St. Ives hospital partnering the host of the annual event in line with its commitment to advancing women’s health and well-being.

The 2024 conference themed ‘Dream, Dare, do’ serves as an empowering call for women to rise above today’s complexities and actively shape a brighter tomorrow. The medical team from the hospital was on ground throughout the duration of the conference, providing complimentary health services to all attendees, organizers and vendors at the event.

In offering these, St. Ives contributed to a holistic conference experience, providing the women leaders and attending entrepreneurs with accessible healthcare and encouraging them to prioritize their health, alongside their professional and personal aspirations.

Some of the medical services rendered at the conference by the St. Ives team included general health assessments, blood pressure monitoring, blood sugar tests, wellness counselling, and personalized health consultation. There were also consultants on hand who answered questions relating to fertility, women’s health, maternal care and preventive healthcare.

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BIG STORY

Dogara Asks Northerners To Stop Condemning President Tinubu Over Tax Reform Bills, Says “He’s Not Anti-North”

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Yakubu Dogara, the former speaker of the house of representatives, has urged northerners not to condemn President Bola Tinubu over the proposed tax reform bills.

Speaking on Monday during Channels Television’s town hall on tax reform bills, Dogara emphasized that Tinubu has made a significant contribution with the proposed bills, stressing that he is not anti-north.

“I want to talk to my brothers in the north; I don’t think this is the time for us to begin to condemn the president and to begin to say that on account of these bills, he is anti-north,” he said.

“I want to remind us that the president has done something that is significant and if he can pursue this to the end, it will be that there is no northern leader of my lifetime that has done what the president has done for the north.”

  • ‘NORTH CAN SURVIVE ON ITS OWN WITHOUT VAT’

Dogara advised viewing the reforms as an opportunity rather than a disadvantage, particularly highlighting the creation of the ministry of livestock development.

He underscored the ministry’s potential to unlock vast economic opportunities for the region, asserting that the north can survive independently without value-added tax (VAT).

“The creation of the livestock ministry is the global business around that; the global market size of dairies, of beef. In the next three years, we will rise to about $2.5 trillion,” Dogara said.

“So if in the north, we are able to organise ourselves in such a way that we can honour just 5 percent of this global market size of dairies and beef, I tell you, that gives us $250 billion.”

“We don’t need VAT from any state in Nigeria to survive. The North can survive on its own. We are the most endowed part of Nigeria and don’t joke about it.”

“If you are in doubt, find out from Australia how much they are raking from just mining minerals. There’s gold everywhere in the north. We have all the resources. We can survive.”

On October 3, Tinubu asked the national assembly to consider and pass four tax reform bills.

The proposed laws include the Nigeria tax bill, tax administration bill, and the joint revenue board establishment bill.

The president is also seeking to repeal the law establishing the Federal Inland Revenue Service (FIRS) and replace it with the Nigeria Revenue Service.

Reacting to the development, the Northern States Governors Forum (NSGF), representing 19 northern states, collectively opposed the proposed bills, following a joint meeting with the northern traditional rulers council at the Kaduna government house on October 28.

The governors asked the national assembly to reject any legislation that might harm the region’s interests, calling for equitable and fair implementation of national policies and programmes to prevent the marginalization of any geopolitical zone.

On October 31, the presidency assured the northern governors that the proposed laws were not recommended by Tinubu to disadvantage any part of the country, as they were designed to improve the lives of Nigerians and optimize existing tax frameworks.

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