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Meter costs spark DisCos–FG showdown on tariffs

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The Bureau of Public Enterprises, an agency of the Federal Government, has said that electricity consumers will pay for the ongoing free meter installation through their tariffs.

The disclosure comes amid a row with electricity distribution companies over who is responsible for covering the cost of the prepaid meters being rolled out under World Bank–funded programmes.

The PUNCH reports that the Federal Government and electricity distribution companies have been at loggerheads over who bears the cost of prepaid meters being rolled out by the Federal Government.

The disagreement erupted after the Minister of Power, Adebayo Adelabu, directed that prepaid meters procured under the World Bank–funded Distribution Sector Recovery Programme must be installed for electricity consumers free of charge, warning that any official or installer found collecting money would be prosecuted.

However, electricity distribution companies expressed doubt over the directive, insisting that although customers may not pay cash upfront, the meters would still be paid for by the DisCos over a period of 10 years, raising concerns about cost recovery, installation expenses, and the financial implications for operators.

Reacting to the controversy, the Director-General of the Bureau of Public Enterprises, Ayo Gbeleyi, dismissed claims that the DisCos were being asked to pay for the meters over a 10-year period, regretting that the Federal Government’s free metering programme was receiving pushback from the DisCos.

Speaking in Lagos at the N501bn bond issuance signing ceremony to settle power sector debt, Gbeleyi expressed concern that the DisCos were giving a wrong narrative as far as the free metering initiative was concerned.

Addressing claims by DisCos that they were expected to repay the cost of the meters over a decade, the BPE boss said such assertions were inaccurate and misleading. He noted that meter costs are embedded in tariffs over time, just like transformers, feeders, and other investments of the DisCos.

“We’ve had pushback where some have said, ‘No, the DisCos are paying for the meters over 10 years.’ The truth is, every component of investment that goes into the DisCos gets recouped through the tariff structure. So, whether it is a feeder pillar, whether it is a transformer, or whether it is a meter, we as consumers will ultimately pay for those pieces of equipment through the tariff design,” he said.

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Gbeleyi’s clarification shows that meters are not given to customers at no cost, as they would pay for them through their tariffs. He added that the DisCos often failed to mention the concessional nature of the Federal Government’s intervention, which he said was to be repaid over 20 years.

“However, what they are not telling you is that the Federal Government’s major intervention is indeed one of the best loan transactions today extended to the power sector. It is a 20-year loan facility. It comes with a five-year principal moratorium and a two-year interest moratorium to the DisCos. We have never seen any capital lending to that sector of that magnitude in the history of the power sector in Nigeria,” Gbeleyi said.

He insisted that suggestions that DisCos were paying for the meters were unfounded. “So, for anyone to then suggest that they are paying over 10 years, or that the DisCos are paying for it, that’s absolutely not the case. So we are taking this opportunity to provide that clarity to Nigerians,” he added.

According to him, the Federal Government had embarked on the Distribution Sector Recovery Programme, which is a $500m loan intervention from the World Bank to assist distribution companies to strengthen their infrastructure and improve governance, as well as enhance liquidity.

“In this regard, a total of about 3.22 million meters are being made available to the DisCos,” Gbeleyi said.

Clarifying the status of the metering initiative, he said that the meters were being given to consumers free of charge.

“At this juncture, permit me to also elaborate and clarify that, last week, together with the Minister of Power, we were at the Apapa Port to inspect the recent batch of meters that are coming to the country. In total, out of the initial contract of about 1,437,500 units of meters, we have received over 600,000 meters. And we have also installed close to 75,000 meters, free of charge indeed, to consumers.”

Gbeleyi stressed that electricity consumers were not required to pay for the meters, noting that the intervention was targeted at addressing Nigeria’s wide metering gap.

“Let me reiterate that customers are not meant to pay for these meters. The meters are meant to be given, especially to the unmetered customers. We have about 5.9 million unmetered customers in the country today,” he said.

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According to him, the World Bank–supported programme would only partially bridge the gap, with another intervention already in place to complement it.

“In order to bridge that gap, there is a programme to implement 3.22 million meters. There is another programme that is being led by the Office of the Special Adviser to the President on Energy under the Presidential Metering Initiative, which will also deliver another batch of 2.61 million meters to the DisCos,” Gbeleyi stated.

Earlier, power distribution companies had raised concerns over the minister’s directive, describing it as politically motivated and lacking proper stakeholder consultation.

Operators, who spoke anonymously due to the sensitive nature of the matter, said Adelabu’s announcement failed to consider the role of meter installers and manufacturers, as well as the question of who would bear installation costs.

Last Thursday, the Federal Government banned electricity distribution companies and installers from collecting any form of payment for meters, with Adelabu issuing the warning during an on-site inspection of newly imported smart meters at APM Terminals, Apapa, Lagos.

The minister said the meters were procured under the World Bank–funded Distribution Sector Recovery Programme and must be installed for consumers free of charge, regardless of their tariff band.

“I want to mention that it is unprecedented that these meters are to be installed and distributed to consumers free of charge—free of charge! Nobody should collect money from any consumer. It is an illegality. It is an offence for the officials of distribution companies across Nigeria to request a dime before installation; even the indirect installers cannot ask consumers for a dime. It has to be installed free of charge so that billings and collections will improve for the sector,” Adelabu said.

Despite this, DisCo operators maintained that the cost burden would still fall on them over time. They said the meters tagged as free by the Federal Government would still be paid for by the DisCos within a period of 10 years, adding that it was unclear why DisCos were expected to bear installation costs.

“Those meters you see, someone has to pay for them, and the government expects the DisCos to bear the cost of the so-called free meters. They said the DisCos can pay it over 10 years,” an official with a distribution company stated, but Gbeleyi described this as untrue.

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The official warned that such costs must be recognised in tariff calculations. “When you ask the DisCos to pay for any capital expenditure, we call it allowable capex. You have to allow it when computing their tariffs; otherwise, it makes their balance sheets toxic,” the source said.

Another operator questioned the role of installers in the arrangement. “We need to know that meter installers are not staff of the DisCos. They are already asking who will pay them if the consumers do not pay. Did the minister consider all those? You said the people should not pay the installers; who should pay them? We, the DisCos, are not the ones installing meters,” the operator said.

The operators described Adelabu’s comments as populist. “The statement was just a populist statement from a politician. We are not sure if the President sent him that message. He said everything should be free; where is the position of cost recovery? Anything you do in the power sector, you have to first consider who bears the cost. Somebody has to bear the cost to avoid debt piling up,” one source stated.

They added that wider consultation was needed to avoid misleading the public. “The government ought to sit with the DisCos and the meter manufacturers to seek advice if the plan is to make sure the people don’t bear any cost, and we will come up with our various contributions.

“But instead of doing that, the government would go and make unrealistic promises to the public. For instance, the meters are coming in batches, but you have made the masses believe that there are enough meters for everyone. That’s not the reality,” another source said.

The standoff testifies to the persistent tensions between regulators and operators in the power sector, even as the Federal Government insists that the metering intervention is designed to protect consumers and improve billing efficiency.

punch.ng

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Read how Nigerians tap savings, loans to buy Dangote refinery shares

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Some Nigerians seeking to invest in the Dangote Petroleum Refinery and Petrochemicals FZE Initial Public Offering have turned to personal savings, loans and proceeds from the sale of assets to raise funds to buy shares, Saturday PUNCH has learnt.

Findings by our correspondents revealed strong interest in the shares among prospective retail investors, some of whom said they expected the investment to yield substantial returns in the future.

While some respondents said they were dipping into savings or raising funds through other means, others said the prevailing economic hardship had made it difficult for them to participate in the offer.

The refinery opened its IPO on Monday, September 14, giving Nigerians an opportunity to own equity in the company.

The offer comprises 4.1 billion ordinary shares priced at N525 each, with the company targeting about N2.15tn to part-fund an expansion that would nearly double the refinery’s capacity to 1.4 million barrels per day.

The minimum subscription is 10 shares, costing N5,250.

Dangote Group Chief Executive Officer, Aliko Dangote, said the low entry threshold was deliberately set to allow ordinary workers, including drivers, cooks and domestic staff, to become shareholders, describing the offer as “the IPO for the people.”

The offer is expected to close on October 13.

Investors turn to savings, loans

A staff member of the Federal Ministry of Works, David Adelabu, described the shares as expensive for struggling civil servants but said he considered the offer an opportunity to become a shareholder in the refinery.

He said, “I have small shares in some companies, including Glo and MTN, but Dangote’s shares will be the highest I will be buying. It is on the high side, but I feel this is an opportunity to become a shareholder in Dangote.

“I understand that the dividends are not going to be immediate, but I don’t mind even if it will entail selling a plot of land I have in Metumbi here in Minna. I will gladly do so.”

A trader in Dutse, Jigawa State, Adamu Bala, said he planned to use savings from his business to buy the shares.

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“I will not sell my house. I will use a small profit from my shop to buy,” he said.

Similarly, a civil servant, Fatima Mannir, said women in her group had started raising money through contributions, known as adashe, to participate in the offer.

“We have started raising money through adashe,” she said.

A trader in Damaturu, Yobe State, Malam Musa Ibrahim, said he invested part of his business savings after learning about the offer.

“I am using part of the money I have saved from my business.

“I believe that if I can invest a small amount now, it may become useful to me in the future. But I am also being careful because business is not easy at the moment,” he said.

Another resident, Aisha Mohammed, said she raised money by cutting down on some household expenses.

“I did not borrow money to buy the shares. I have been saving little by little, and when I heard about the offer, I decided to use part of what I had saved,” she said.

A businessman, Abdullahi Yusuf, however, said he obtained financial assistance from a friend to increase his subscription.

“I wanted to buy more shares than what my savings could afford, so I discussed it with a friend who agreed to lend me some money.

“I know that borrowing money to invest carries risks, but I am hoping that the investment will perform well. I will repay the money from my business income,” he said.

A petty trader, Hauwa Lawan, said she sold some personal belongings she no longer used and added the proceeds to her savings to finance her purchase.

“I sold some things that I was no longer using and added the money to my savings,” she said.

A farmer, Mallam Abdullahi Adamu, said he sold farm produce to raise about N500,000 to invest in the shares.

In Kano State, an investor, Abdulmalik Ibrahim, said he bought 10 shares for N5,250 using personal funds.

Hardship keeps some investors away

While some Nigerians are finding ways to participate in the IPO, others said economic pressures had put the investment beyond their reach.

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A civil servant in Kogi State, Saliu Joseph, said he would have loved to invest but had just paid his children’s school fees.

“Right now, I don’t think I can afford to participate unless a miracle happens,” he said.

A retired permanent secretary in the state, Bola Boro, also said he would not participate because he could not afford the investment at the moment.

“As a retired civil servant, I cannot afford such an amount to invest in the offer. Even though I am a fan of investment through the stock market, which I have been doing for years, I don’t think it will be convenient for me to participate considering the time frame of just one month,” he said.

A civil servant, Kuta Abdulahi, said the financial demands of his children’s education had left him unable to participate in the share offer.

“I must tell you the truth, I know about the Dangote Refinery shares, but I cannot even think of it at this time. My children are just resuming a new term in school. Where will I get the money for their school fees before thinking of buying shares? Please, I have a lot on my head,” he said.

Similarly, a vulcaniser, Ahmed Alkali, said his income was barely enough to meet his family’s basic needs, making investment in shares difficult.

“With the kind of job I do, I am working from hand to mouth. So, how can I buy shares when I have not eaten?” he asked.

Experts warn against borrowing

Investment experts, however, cautioned Nigerians against taking loans, selling properties or committing all their savings to the IPO, warning that equity investments carry risks.

Speaking with Saturday PUNCH, the Group Managing Director of Lancelot Group, Adebayo Adeleke, urged prospective investors to understand the risks associated with the capital market before committing their funds to the IPO.

Adeleke, who is also a former Secretary of the Independent Shareholders Association of Nigeria, said capital market investments should be made with funds that investors could afford to leave untouched for the long term, noting that equities were unsuitable for people struggling to meet immediate financial needs.

He said, “When you buy shares, you are buying a portion of the ownership of the business. Investment takes a lot of time to pass through gestation, to stability, to profitability. And you cannot, with any degree of certainty, predict when the company is going to turn the corner and begin to produce profits.

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“So, investment money is not the money you are likely to need in the next two months, three months, six months, even one year. If you cannot part with your money for a minimum of three to five years, the capital market is not the place to invest.”

Adeleke, however, described the IPO as a strategic investment, citing the refinery’s scale and demand for its products.

Also speaking, the Head of Financial Institutions Ratings at Agusto & Co., Ayokunle Olubunmi, urged Nigerians to consider the risks associated with the investment and avoid committing all their savings to the offer.

He said, “There are plenty of risks to this business. It’s not risk-free. Things can get worse for the business. Valuation is based on expectations of what will happen in the future. Things might not go as planned. And, like we all know, equity is a risky business.”

Olubunmi particularly cautioned prospective investors against selling property or using up all their savings to invest in the offer.

He advised them to invest only a portion of their funds and diversify their portfolios.

The expert also advised those considering taking loans to buy the shares to have a separate and reliable repayment plan rather than depending on returns from the investment.

The Emir of Kano, Muhammadu Sanusi II, had earlier warned prospective investors against using their children’s school fees or selling their homes to invest in the shares.

Sanusi, who gave the warning on Thursday while speaking at the company’s roadshow in Kano, urged prospective investors to invest only money they could afford to set aside for some time, suggesting amounts such as N10,000, N20,000 or N30,000.

Source: punchng.com

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ARE NIGERIANS BUILDING CHINA’S ECONOMY WHILE NEGLECTING THEIR OWN?

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While other nations are busy producing, manufacturing and exporting, Nigeria must ask itself a difficult question: Are we building our own economy, or simply creating a bigger market for other countries?

Nigeria has a huge population, abundant natural resources and a massive consumer market. Yet the country continues to depend heavily on imported finished products—from electronics and clothing to machinery, household goods and other consumer items.

The issue is not simply about Chinese businesses or businesses from any other foreign country operating in Nigeria. Foreign investment can bring capital, technology, jobs and expertise.

The bigger issue is whether **Nigerian businesses are being given the opportunity and support to manufacture competitively at home.

Instead of remaining primarily a consumer of finished products, Nigeria needs to strengthen its manufacturing sector and move further up the value chain.

Nigeria needs to produce, not just consume.

A stronger manufacturing economy could help Nigeria:

* Create more jobs for Nigerians
* Add value to locally available raw materials
* Develop industrial skills and technology
* Reduce excessive dependence on imported finished goods
* Build competitive Nigerian companies
* Increase the country’s ability to export

The goal should not be to drive legitimate foreign businesses out of Nigeria. The goal should be to build an economy where **Nigerian manufacturers can compete, grow and eventually take Nigerian-made products to markets around the world.

The question Nigerians should be asking is simple:

**Why should Nigeria remain one of the world’s biggest markets for finished products when we have the potential to manufacture many of them ourselves?

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🇳🇬 **Nigeria must move from being predominantly a consumer nation to becoming a stronger producer, manufacturer and exporter.

What do you think?

Which products should Nigeria prioritize for local manufacturing instead of relying heavily on imports?

Share your thoughts in the comments.

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ICRC defends toll pricing on highways

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The Infrastructure Concession Regulatory Commission has defended the toll pricing structure under the Highway Development and Management Initiative, saying charges are evaluated against the quality and benefits of the upgraded roads.

In a statement made available to PUNCH Online on Thursday, the Director-General, Dr. Jobson Ewalefoh, cited the 227-kilometre Akwanga–Makurdi road corridor as an example.

He said the route has four toll gates, and motorists pay as they travel along it.

He argued that toll payments should be viewed against the previous costs imposed by the poor condition of the road, including lost man-hours, vehicle damage and accident risks.

Feedback from road users, he said, shows many motorists are willing to pay tolls where they see clear improvements in road quality.

Some drivers have expressed support for similar arrangements on other major corridors if the roads are upgraded to the same standard.

“That, to me, is the beauty of a well-structured PPP,” Ewalefoh said.

He explained that negotiators carefully consider toll pricing to keep charges fair. A portion of the revenue is set aside specifically for road maintenance. Under the concession agreements, the government does not bear additional maintenance costs for the duration of the contract.

The government must repair potholes within 48 hours, and it funds major routine repairs from the dedicated toll revenue.

Source: punchng.com

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