President Muhammadu Buhari has approved a one-year waiver of import levy on electricity meters to help improve Nigeria’s electricity meter deficit.
This was announced by the Federal Government in a social media statement.
ELECTRICITY SECTOR: In line with the Federal Government’s commitment to supporting reforms in the electricity industry, and the implementation of @NERCNG’s Meter Asset Provider (MAP) scheme, President @MBuhari has approved a one year waiver of Import Levy on electricity meters.
— Presidency Nigeria (@NGRPresident) August 25, 2020
The media aide to the presidency, Tolu Ogunlesi, announced that the import levy is a big deal in Nigeria’s electricity industry, citing the Meter Asset Provider (MAP) Regulation of the Nigerian Electricity Regulatory Commission (NERC) in 2018.
This right here: A big deal. @NERCNG issued a Meter Asset Provider(MAP) Regulation in 2018 (including targets for DisCos) & has also, at the beginning of 2020, issued an Order capping how much DisCos can charge unmetered consumers—as part of efforts to tackle ‘estimated’ billing. https://t.co/fy53HMv9zw
— tolu ogunlesi (@toluogunlesi) August 25, 2020
Ogunlesi added that NERC also ordered a cap on how much DisCos can charge unmetered consumers, as part of efforts to tackle ‘estimated’ billing.
The Presidency said the new regulations would be in line with its commitment to support Nigeria’s electricity reforms and the NERC’s Meter Asset Provider (MAP) scheme. In 2020, Nigeria’s electricity metering deficit rose to 6.75 million, from 4.5 million in 2015.
Nairametrics reported last month that DisCos operating in Nigeria were seeking funding from CBN to support the roll-out of meters nationwide.
Mr. Sunday Oduntan, the Executive Director in charge of research and advocacy at the Association of Nigerian Electricity Distributors (ANED), said the funding would help ensure that all electricity customers were adequately metered under the Meter Asset Provider (MAP) regulation.
NNPC says NO to petrol pump price hike in May
There would be no increase in the ex-depot price of Premium Motor Spirit in the month of May 2021.
The Nigerian National Petroleum Corporation (NNPC) has assured Nigerians that there would be no increase in the ex-depot price of Premium Motor Spirit, popularly known as Petrol in May.
This was disclosed by the Group Managing Director of NNPC, Mele Kyari, on Monday via the Corporation’s Twitter handle.
It tweeted, “There would be no increase in the ex-depot price of Premium Motor Spirit in the month of May 2021.”
Ex-depot price is the cost of petrol at depots, from where filling stations purchase the commodity before dispensing to final consumers.
Also, the GMD announced that there would be no increase in the ex-depot price of Premium Motor Spirit (PMS) in the month of May 2021.
— NNPC Group (@NNPCgroup) April 19, 2021
Kyari also added that Petroleum Tanker Drivers had suspended their proposed strike after the intervention of NNPC in the impasse between the PTD and the National Association of Road Transport Owners.
“We have given our commitment to both NARTO and PTD that we will resolve the underlining issue between them and come back to the table within a week so that we’ll have a total closure of the dispute,” he added.
What you should know
- NNPC has maintained an ex-depot price of N148/litre since February despite the hike in the actual cost of the commodity, hence incurring subsidy of over N120bn monthly.
- Also in March, the NNPC said it would maintain its ex-depot price for petrol until the conclusion of ongoing engagement with the organised labour and other stakeholders.
NCDMB’s Oil and Gas Parks and their many adversaries
New businesses within the NOGAPS will face intense competition from foreign OEMs that do not have to battle with tariffs, a harsh business terrain and different tax treatment.
In 2018 the Nigerian Content Development and Monitoring Board (NCDMB), the body saddled with driving the development of Nigerian content in the Nigerian oil and gas sector, did a groundbreaking of the Nigerian Oil and Gas Park Scheme (NOGAPS), a scheme that involves the construction of sprawling oil and gas parks in Bayelsa, Imo and Cross Rivers State.
In a visit last week to one of the parks currently under construction in Emeya 1, Ogbia, Bayelsa State, the Minister of Petroleum for State, Chief Timipre Sylva, expressed delight at how the project was quickly progressing and was now at 70% completion. Mr Simbi Wabote, Executive Secretary of the NCDMB, during the visit also noted that the Oil and Gas Park project “is in line with the Federal Government’s mandate to develop indigenous capacities for the oil and gas industry.”
While this is highly commendable, as the project will indeed reduce Nigeria’s dependence on import of oil and gas equipment and provide jobs for local indigenes -which would likely reduce restiveness in the area-, there exist significant challenges to this project achieving its goals.
Perhaps one of the biggest of them is the African Continental Free Trade Area (AfCFTA) regime which is expected to open Nigeria’s borders to an influx of imports from other countries within Africa. Beyond opening the borders, however, the tax treatment given to domestically produced items will be no different from similar products imported, and the typical tariffs for imported items will be removed.
This essentially means that large and established original equipment manufacturers (OEMs) from other African countries may on the basis of their economies of scale be able to supply the same products produced in the oil and gas parks at lower rates. A report by Dun & Bradstreet reveals that in Africa, countries like Guinea, Gabon, Burkina Faso and Ghana that flank Nigeria play host to various oil and gas OEMs.
With the large oil and gas market Nigeria has, these companies will seek to make inroads into Nigeria under the AfCFTA regime. This will mean that the new businesses within the NOGAPS will face intense competition from foreign players that do not have to battle with tariffs and different tax treatment. Additionally, the Nigerian culture of preferring imported products over domestically manufactured ones might play a role in this, particularly if the prices of the imported ones even up with domestically produced ones or only have a slim margin.
If the patronage for Innoson vehicles is anything to go by, in a market where there is no real difference in price between that and the domestically produced ones, we will see a preference for imported products.
All of this will be further aggravated by Nigeria’s doing business difficulties. Things like delays in obtaining permits, approvals and licenses, the corruption that accompanies these processes, weak currency and dual exchange rates, poor infrastructure and lack of power supply abound. While the Nigerian businesses struggle with this, their foreign counterparts get to produce under more convenient conditions and are thus able to deliver within time and without the additional costs passed to consumers through these poor doing business practices.
While Mr Wabote has promised that the park in Ogbia will have dedicated power supply, it is hard to imagine that this power will not significantly cost the businesses if they are served at maximum capacity. At number 131 on the World Bank’s Ease of Doing Business Ranking, a park would not solve Nigeria’s problems, only a positive commitment to fix these doing business issues will.
The christening of a park as an “oil and gas park” in the 21st century, where countries of the world –and indeed private companies- are working towards achieving increased use of cleaner energy sources, is counterintuitive. The park should be an energy park that integrates significant research and development in its function as well as innovation and production of renewable energy equipment, both adapted to benefit from local conditions and standardized for export purposes.
It seems too, that not much consideration has been given to export of these equipment, as the parks earmarked so far are in landlocked Imo, port-less Bayelsa and Cross River that feeds into Cameroon, which is not a very prime market, although the DRC on the other end could attempt to compensate for this. It might be worth considering, the setting up of a park in Lagos – perhaps in the same vicinity as the Dangote refinery.
The park would benefit from being able to supply equipment to the refinery (especially as the refinery starts production in early 2023). It will also be able to tap into the global market through export via the Lekki port. This might also be a good time for the Agge deep sea port mulled by the Bayelsa State government to come onstream to open up the Ogbia park to a global market.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- VFD Group set to raise additional capital of N9.01 billion through rights issue and private placement.
- GT Bank records a 9% dip in profit to N45.55 billion in Q1 2021.
- Secure Electronic Technology Plc records a 121% surge in Profit after tax in Q1 2021.
- Lafarge Africa Plc notifies stakeholders of 62nd Annual General Meeting.
- GlaxoSmithKline (GSK) announces Annual General Meeting.