The Federal Government has said that electricity consumers who paid for meters under the Meter Asset Provider (MAP) scheme, will have a refund of their money.
This clarification is coming on the heels of enquiries by some electricity consumers, who wanted to know if the money they had paid for meters under the MAP scheme, would be refunded, bearing in mind the recent government’s pronouncement that 6 million meters would be distributed at no cost to customers under the National Mass Metering Programme (NMMP)
According to a report from Punch, this disclosure was made by the Nigerian Electricity Regulatory Commission (NERC), in an email statement, through its Head Public Affairs, Mr Michael Faloseyi, on Wednesday, December 30, 2020.
What the NERC is saying
The regulator said that all power distribution companies (Discos) had keyed into the NMMP initiative, adding, “Meter deployments are commencing in earnest across all Discos under the first phase of the NMMP.”
The commission said the first rollout of meters had already started based on meters that were already available at the warehouses of the Discos and meter asset providers.
On if the consumers would later bear the cost of meters, NERC said, “Given that all prudent costs are borne by customers, the full cost of metering would form part of the tariff once the industry assumes full cost recovery.”
“All customers who made payment for meters under the MAP scheme would be refunded. The modality for the refund of the meter’s cost funded by the customers either through upfront payment or amortized payments is being worked out.”
What you should know
- It can be recalled that in a bid to close the huge metering gap in the power sector, NERC approved MAP in March 2018, a regulation that provides for the supply, financing, installation and maintenance of end-user meters by other parties approved by the commission.
- The scheme introduces third-party meter asset providers as a new set of service providers in Nigeria Electricity Supply Industry.
- Under the MAP scheme, which took off on May 1, 2019, electricity consumers have two options for acquiring a meter: upfront payment or instalment payments through metering service charge on a monthly basis.
- But the scheme has suffered setbacks, including changes in fiscal policy and the limited availability of long-term funding, according to the regulator.
High demand for Azure, homework tools boost Microsoft earnings
Microsoft disclosed Azure revenue grew 50% as more businesses integrated into the cloud.
The world’s most valuable software maker, Microsoft, announced impressive earnings results for the quarter that ended on December 31, 2020, as data retrieved showed that the $1.75 trillion company saw increased demand on its work-at-home tools triggered by the reduced human mobility presently in play.
- Microsoft disclosed that Azure’s revenue grew by 50% as more businesses integrated into the cloud.
- Stock experts had expected around 42% growth, although the software giant didn’t reveal Azure’s revenue in dollars.
- The COVID-19 pandemic caused many businesses to speed up moves to the cloud and upgrades to internet-based collaboration software.
The Productivity and Business Processes segment, including LinkedIn, Office, and Dynamics, printed $13.35 billion in revenue, which was up 13% and more than the $12.89 billion anticipated by wall street experts.
“What we have witnessed over the past year is the dawn of the second wave of the digital transformation sweeping every company and every industry,” said Satya Nadella, Chief Executive Officer of Microsoft.
“Building their own digital capability is the new currency driving every organization’s resilience and growth. Microsoft is powering this shift with the world’s largest and most comprehensive cloud platform.”
Microsoft Corp. announced its earnings results for the quarter ended December 31, 2020, as compared to the corresponding period of last fiscal year:
- Revenue was $43.1 billion, increasing by 17%.
- Operating income was $17.9 billion, increasing by 29%.
- Net income was $15.5 billion, increasing by 33%.
- Diluted earnings per share were $2.03, increasing by 34%.
Earnings: $2.03 per share, adjusted, vs. $1.64 per share as expected by Wall Street analysts, according to Refinitiv.
“Accelerating demand for our differentiated offerings drove commercial cloud revenue to $16.7 billion, up 34% year over year,” said Amy Hood, Executive Vice President, and Chief Financial Officer of Microsoft. “We continue to benefit from our investments in strategic, high-growth areas.”
Oil companies warn that proposal in PIB will discourage offshore investment
The multinational oil company has objected to proposals in the long-awaited PIB, insisting that it will discourage investment in new offshore projects.
International oil companies in Nigeria have expressed their fears that proposals in the long-awaited Petroleum Industry Bill (PIB) will discourage investment in new offshore projects.
They said that the bill, which is before the National Assembly for consideration and passage, is seen as unfavourable for deepwater projects, and urged the Federal Government to offer royalty relief programmes.
This disclosure was made by the Managing Director/Chief Executive of Total Exploration and Production Nigeria Limited, Mike Sangster, to the lawmakers during a public hearing on the PIB in Abuja, according to Bloomberg.
What the Managing Director of Total told lawmakers
Mike Sangster, in his statement, said, “Our review of the Petroleum Industry Bill shows that deepwater provisions do not provide a favourable environment for future investments and for the launching of new projects.”
While speaking on behalf of the Oil Producers Trade Section (OPTS), a group of 30 oil producers that include Royal Dutch Shell, Exxon Mobil Corporation, Chevron Corporation and Eni SpA, which he also chairs, Sangster said that to encourage new investment, the proposed law should grant deepwater oil projects full royalty relief for the first 5 years, or a graduated royalty programme.
Making a presentation on gas, Sangster said, “The PIB should provide a clear path for transitioning to a free market-based pricing, not add additional compliance conditions on domestic gas delivery obligations as a precondition for export gas supply.”
On the preservation of terms of existing investment, Sangster said, “We recognize the government’s right to change laws but the PIB must explicitly preserve rights. Operators should be allowed to retain the entirety of their lease areas and new terms should apply to new contracts, licenses and leases.”
He noted that Nigeria was facing growing competition for new investments, as the country was able to attract only $3 billion or 4% out of the $70 billion that was spent on new projects in Africa between 2015 and 2019.
What you should know
- The passage of PIB, which has faced a couple of setbacks for almost 2 decades, has been held up by political disagreement and objections from International oil companies who say that government is asking for an excessive increase in revenue.
- The bill seeks to introduce pertinent changes to the governance, administrative, the regulatory and fiscal framework of the Nigerian oil and gas industry in order to ensure transparency, strengthen the governing institutions and attract investment capital, among other objectives.
- The oil firms desire a critical look into their concerns about the PIB as at least half of Nigeria’s total crude output is from offshore oilfields, helping to offset declining production from mature onshore assets. But recent discoveries have remained undeveloped in the face of regulatory and legislative uncertainty.
Covid-19: No more lockdown, CBN advises government
Despite rising Covid-19 cases, the CBN MPC encourages government to avoid locking down the economy again.
The Central Bank of Nigeria encouraged the Federal Government of Nigeria to avoid locking down the economy again as the second wave of Covid-19 causes an increase in confirmed cases and more deaths.
The apex bank cited the negative impact of another lockdown on the economy as a major concern suggesting that sustaining the tepid economic recovery was perhaps a higher priority than curtailing the fast-spreading variant of the second wave virus via another lockdown.
The remarks were contained in the monetary policy communique read out by the central bank governor Godwin Emefiele following the end of the bank’s monetary policy committee meeting, the first for the year.
“While expressing understanding of the public health dilemma of the recent spike in infections, MPC encouraged Government not to consider a wholesome lockdown of the economy so as not to reverse the current gains of the stimulus earlier provided in 2020.” Emefiele
As of January 26, 2020, Nigeria had a total number of Covid-19 cases of about 124, 299, and 1,522 deaths as the second wave continue to spread rapidly across the country. Since December 1st, Nigeria’s positive cases have risen by about 56, 742 cases (83% ) from about 67,557 on the last day of November 2021.
However, the central bank’s recommendations are hinged on the precarious state of the economy which is highlighted throughout a rather sobering MPC communique. In one statement the apex bank admitted that the rise in covid-19 cases was dragging economic recovery backward as more Nigerians become wary of socializing but the spate of economic recovery cannot be jeopardized.
According to the CBN “the outlook for the recovery, however, appears to be dampened by the second wave of the pandemic considering its intensity” yet it still maintained that the previous lockdown was the trigger for another recession.
“In the Committee’s consideration, it noted that the COVID-19 pandemic and the necessary measures put in place by the Government to forestall its public health impact, such as the lockdown and other associated restrictions, contributed to the Nigerian economy going into recession, much like almost every other country in the world.”
CBN Paints a gloomy picture of the economic recovery
The members of the monetary policy committee also detailed challenges to economic recovery being experienced by the country such as higher inflationary rates, weak PMI numbers, and an increase in non-performing loan ratios of commercial banks.
On increase in non-performing loans
“The Monetary Policy Committee (MPC), however, noted the marginal increase in the Non-Performing Loans (NPLs) ratio which rose to 6.01 percent at end-December 2020 from 5.88 percent at end-November 2020 and above the prudential maximum threshold of 5.0 percent. While noting that this development is not unexpected under the prevailing circumstances, it urged the Bank to strengthen its macroprudential framework to bring NPLs below the prescribed benchmark.”
On PMI numbers
The MPC noted with concern the continuing sluggish recovery in the Manufacturing and Non-Manufacturing Purchasing Managers’
Indices (PMIs), which remained below the 50-index point benchmark in December 2020, at 49.6 and 45.7 index points, respectively, compared with 50.2 and 47.6 index points during the previous month. This weak performance was attributed to the resurgence of the pandemic, foreign exchange pressures, increased costs of production, general increase in prices and decline in economic activities.
This uptick was attributed to the increase in both the food and core components of inflation, which rose to 19.56 and 11.37 percent in December 2020, respectively, from 18.30 and 11.01 percent in November 2020. This continued upsurge in food inflation was attributed to the logistical bottlenecks, spurred by the increasing security challenges in many parts of the country, which disrupted food production and supply to the market. Other factors driving the core inflation, include the recent deregulation of the downstream sector of the oil industry, which led to hikes in the price of Premium Motor Spirit (PMS) and the upward adjustment in electricity tariff.
What this means
As the economy slowly recovers from the Covid-19 induced lockdown, several of our major indicators still show there is trouble ahead. These 3 indicators are some of the most telling.
- Higher non-performing loans, though expected are symptomatic of what businesses are currently going through as they strive to improve their balance sheet. With weaker sales and piling inventory most businesses will continue to struggle to meet up with their debt obligations increasing the number of non-performing loans in the country.
- The Purchasing Managers Index is a critical bellwether for predicting when Nigeria gets out of the recession. As a compilation of how businesses are fairing, an index below 50 suggests we are far from a V-shaped recovery and could face a longer wait to get out of the current recession.
- Nigeria’s galloping inflation rate and economic contraction have created stagflation that puts the economy in a rather precarious situation. Much of the causative factors for the rising inflation are outside of the control of the CBN suggesting a higher inflation rate could persist in the coming months.
- The CBN indicates we could get out of higher inflation rates later this year, but not before it hit its peak as we expect the cost of goods and services to keep rising.
Despite the gloomy picture, the CBN expects the economy to recover this year provided the country continues with its economic stimulus.
Available data and forecasts for key macroeconomic variables for the Nigerian economy suggest further improvement in output
growth in the first quarter of 2021. This would be supported by the coordinated and sustained interventions of the monetary and fiscal authorities, including the broad-based stimulus and liquidity injections.
But to ensure its optimistic outlook for the economy comes through, the CBN is recommending that more efforts should be geared towards acquiring and distributing vaccines rather than shutting down the economy.
“Members thus agreed that the Committee’s current priority remains to quicken the pace of the recovery through sustained and targeted spending by the fiscal authority supported by the Bank’s interventions. In this light, it was thought necessary to increase collaboration with the fiscal authority by providing complementary spending to finance productive ventures in a bid to improve aggregate supply and reduce prices. This is in addition to effectively collaborating with the Presidential Task Force on COVID-19 through the existing private sector Coalition against COVID-19 (CACOVID) to procure and distribute vaccines to fast-track the pick-up of business activities and economic recovery.”