Pre-paid meter to be replaced after 10 years
The Nigerian Electricity Regulatory Commission, NERC, has directed customers to seek refund in form of ‘Energy Credit’, spanning a period of three years, from Electricity Distribution Companies, DISCOs, for prepaid meters purchased under the Meter Asset Provider (MAP) scheme.
The electricity regulator indicated that the directive was in compliance with the national mass metering regulations 2021.
The Order No: NERC/2023/001, which was obtained by Vanguard, was signed by Chairman of the Commission, Sanusi Garba and Commissioner, Legal, Licensing & Compliance, Dafe Akpeneye.
The order is coming at the backdrop of the recent upward review of the prices of the single-phase and three-phase meter which rose to N81,975.16 from N58,661.6, and N143,836.10 from N109,684.36 respectively.
The new directive titled, ‘Order on the Reimbursement Meter Cost,’ stated that pre-paid meters have an average usefulness of 10 years.
NERC, in the directive, stated: “The Meter Asset Provider and National Mass Metering Regulations, 2021 (the Regulations) Section 8(f) provides that Distribution Licensees are obligated to reimburse customers who pay for meters under the MAP framework through equal installments of energy credits, at the time of vending, with the cost of the meter amortised over a maximum period of 36 months.
“Section 24(1) (b) of the Regulations provides that where a Customer elects to make upfront payment for meters under these regulations, the cost of the meter shall be refunded through energy credits by the distribution licensee.
“The reimbursement schedules shall be as approved by the commission, having regard to an evaluation of the financial standing of the distribution licensee. This provision also applies to upfront payment made by customers upon commencement of the MAP framework in 2018.
“The Commission conducted an evaluation of the financial standing of the DISCOs which resulted in a review of the hitherto 36-months reimbursement period.”
NERC explained that the order seeks to ensure fairness, transparency and accountability of the metering process under the MAP framework, adding that it provides a fair mechanism for the reimbursement of meter costs to customers under the scheme.
It added, “The Order also aligned the amortizations period for reimbursement with the 10 years average useful life of electronic meters. It also aligned the amortisation period of the cost of MAP meters with the repayment of the concessionary tenor of other financing sources for metering and recognise meters installed under the MAP framework in the Regulatory Asset Base (RAB) of DISCOs.”
The regulator maintained that it imposed the regulations as an obligation on the DISCOs to reimburse customers that paid for meters under the MAP scheme through equal installment of energy credit over a 36-month period.
However, it added that the cost of the prepaid meter paid by the customers under MAP shall be amortised over 120 equal installments and reimbursed through energy credits computed based on the prevailing tariff at the time of vending.
It stated that, “Where a customer does not vend in a given month or months, the DISCOs shall at the point of the next vending, refund the accumulated energy credits due to the customers for the period not vended. Where a postpaid customer purchased a meter under the MAP framework, the reimbursement by the DISCO shall be in the form of a rebate on customers.
“The DISCOs have, therefore, been advised to file monthly reports with NERC containing a breakdown of the total monetary value of refunds to customers through energy credit in accordance with the Commission’s prescribed template.
“The Order further emphasised that the whole meter installed under the MAP framework shall be included in the Regulatory Asset Base, RAB, of the DISCOs by the commission at the next major or extraordinary tariff review.”
Why We Seek Inclusion In Conditional Cash Transfer –Obiora Oti
THE National Vice President of Mobile Money and Bank Association of Nigeria (MMBAN), Obiora Oti, said money wallet bankers would improve their capitalisation and liquidity if the government included them as facilitators in the conditional cash transfer scheme.
Oti told The ICIR exclusively on Wednesday, November 8, that many young people involved in the money wallet business could be supported with a seed capital of about N50,000 and become part of the Federal Government’s cash transfer scheme.
This development, he said, would ensure enough liquidity for them to stay in business since many of them have undergone financial inclusion training under the Central Bank of Nigeria (CBN) policy guidelines.
Oti recalled how he supported someone with seed money of N20,000 in 2020, during the COVID year, and how the person has become an aggregator and now manages N15,000,000 capital.
“This is how financial inclusion works, and it is one of the fastest ways of removing people from poverty,” he said.
“Typically, you don’t grow the gross domestic product (GDP) by throwing money to people through interventions. When there is a channel for such distribution, it stimulates the economy’s growth,” he added.
He also argued that empowering money wallet agents was a sure way of driving Nigeria’s financial inclusion and economic base.
According to Oti, Nigeria has many lessons from Kenya in its financial inclusion success story because of the Kenyan government’s involvement and facilitation through policy direction and incentives to operatives.
Agency banking allows customers to deposit and withdraw money instead of going to the bank or using automated teller machines (ATMs.)
Currently, there is one agency banking agent for every 80 Nigerians and one bank branch for every 27,000, according to a 2023 report on the Nigerian Financial Services Market.
Naira Falls To N1, 000/$ In Official Market
Despite recent moves by the Central Bank of Nigeria to strengthen the foreign exchange market, the naira closed trading on the Investor & Exporter forex window on Thursday at N996.75/$.
This is a 13.95 per cent decline from the N874.71/$ it closed trading on Wednesday. So far, the naira has lost 27.75 per cent of its value since opening the week at N780.23/$ according to details on FMDQ OTC Securities Exchange.
Since firming up against the dollar last week, after news that the apex bank was clearing some of its backlog broke, the naira has been on a steady decline in both the official and parallel markets.
So far, the naira has lost about 40 per cent of its value in 2023, earning the tag of one of the worst performing African currencies from the World Bank.
In the parallel market, the currency has lost value too, falling from N950/$ as of Friday to close to N1,140/$ as of Thursday according to Bureaux De Change operators who spoke to The PUNCH. This represents a 20 per cent decline.
A trader who only gave his name as Kadri said, “Dollar is N1,100 if you want to sell. It is N1,140 if you want to buy.” Another trader, Awolu, stated that he would buy the dollar at N1,100 from our correspondent.
He said, “Dollar is N1,100 if you want to sell to me.”
Earlier in the week, the President of the Association of Bureaux De Change Operators of Nigeria, Aminu Gwadabe, told The PUNCH that the dollar was gaining against the naira because people who had bought it at a higher price were resisting its fall.
He said, “Speculators are always looking at elements of sustainability. Once they sense that it (the injection) is not continuous, they begin to react. They begin to react. It is the reaction of the market we are witnessing. Also, there is resistance. There are people that bought at a higher price that this does not favour. People are not willing to take further losses.”
Concerned with the fall of the currency, the presidency recently stated that it is planning policies to strengthen the local currency.
A Special Adviser to the President on Economic Matters, Dr Tope Fasua, who was representing the Vice President, Kashim Shettima, at an event, said: “For those who are speculating and praying and wishing that the currency would become nonsense, I believe that the central bank is rolling out the policies and the government that I serve, led by the President, will shock some of them.”
Dangote Repatriates $688m From African Operations
Dangote Industries Limited has revealed that it has so far repatriated over $687.98m through various banks in Nigeria.
In a statement on Sunday, the company said it brought in $576,008,672.41 through various banks in Nigeria, in addition to a $111,968,109.38 cash swap arrangement between Dangote Cement Plc and Ethiopian Airlines.
Dangote re-affirmed its determination and belief in Nigeria, noting that the government of President Bola Ahmed Tinubu had shown the will and resolve to get the economy moving again.
“We are not body-shop investors. We believe in Nigeria, and we believe in Africa. We are genuine and authentic about our investments, and we call on all relevant agencies to investigate our FX transactions in the past 10 years and make public any infraction noticed or discovered.”
Insisting that all forex purchased in respect of its African Project Expansion were genuine and fully utilised for what they were meant for, the firm noted that the projects for which the forex was utilised were visible for everyone to see.
“It is on record that some of these projects were commissioned by Nigerian top-ranking government officials and in attendance were chief executives of various banks, captains of Industries, and the Presidents of the host countries supported by their Senior Government officials.
“The commissioning events of these projects were well documented and covered by both local and international media. There are also print and electronic copies of the commissioning ceremonies as further testimony to the judicious utilisation of the funds.”
Dangote further explained that its massive investments in Africa would lead to the repatriation of forex in the very near future and boost foreign exchange earnings in Nigeria, as well as stabilise the forex market.