By Yahaya Umar 

Following the surge in electricity tariffs for Band A customers in the nation from N66/kWh to N208/kWh, the Manufacturers Association of Nigeria ,MAN, lodged a petition with NERC, urging a reversal of the new electricity rates for its members.

Citing numerous economic challenges confronting manufacturers and business owners in the country, the association argued that the escalated electricity tariffs would further exacerbate the hardships of conducting business in the nation.

Meanwhile, Power Distribution Companies ,DisCos, are reportedly contemplating widespread disconnections of several companies and factories, fearing substantial losses estimated in billions of naira.

Power distribution companies ,DisCos, in Nigeria face billions in collection losses as manufacturers decide to pay the old tariff rates instead of the new rates approved by industry regulators.

The Manufacturers Association of Nigeria ,MAN, has instructed its members across the country to persist in paying the previous rate of N66/kWh to the distribution companies ,DisCos, pending a resolution of the petition filed by the association to the National Electricity Regulatory Commission ,NERC,

NERC approved the new tariff due to financial illiquidity and mounting losses incurred by the DisCos stemming from the lack of a cost-reflective tariff within the power sector.

The Minister of Power, Adebayo Adelabu, had earlier said that the federal government was subsidizing about 67% of the power sector, expected to amount to N2.9 trillion by the end of 2024.

The report also showed that about 52% of electricity costs would not be subsidized monthly as the government has halted a significant portion of the electricity subsidy.

With the refusal of MAN to pay the tariff, DisCos is expected to bear more losses in the coming months.

According to the latest report by NERC, DisCos, revenue collections stood at N294.95 billion out of the N399.69 billion billed to customers in the fourth quarter of 2023, indicating a N105.1 billion loss in total.

AljazirahNigeria learned that manufacturers believe they are being unfairly targeted with high electricity tariffs.

This appears to be part of a government strategy to shift the burden of electricity cross-subsidies onto them, a responsibility previously borne by the government before it ceased subsidizing the sector. The aim is to impose cost-reflective rates on these companies.

Electricity cross-subsidy is a process where tariffs are adjusted so that customers with high demand and more reliable power supply pay higher rates.

This is done to compensate for customers who receive limited power and face affordability challenges.

In a letter dated May 9, 2024, and addressed to its members, MAN instructed them to adhere to the previous tariff rates and urged them not to be deterred by NERC’s actions, emphasizing the association’s commitment to escalating discussions with the DisCos and the federal government.

“In the face of this stark reality and in order to ensure that members’ businesses are not disrupted and the DisCos are not starved of needed revenue, you are advised to pay the old rate on account, whilst we intensify our engagement with NERC/DisCos with a view to ensuring that due process is followed in tariff setting and that our members are only required to pay a fair price for power supplied.

“We have since instructed our Expert/Solicitor to stand ready to take further necessary action to ensure that our members are not intimidated or compelled to pay the rate in dispute”, the letter read in part.

To secure payment of the revised tariff, sources said DisCos are threatening widespread disconnection targeted at companies and factories that have refused to pay the new rate implemented by NERC.

An official who chose to remain anonymous told this newspaper that the power distribution companies would have no choice but to disconnect some of these companies from their services as the old rate remains unsustainable for the electricity providers.

“I think DisCos have no choice but to embark on widespread disconnection to avoid carrying over these losses.

“Meanwhile, we also understand some of the companies are seeking alternatives such as gas and ‘eligible’ customers to reduce their electricity cost”, the source said.

Furthermore, Mr. Ajayi Kadiri, the Director-General of MAN, stated in his correspondence that members have received bills indicating the tariff hike, with some being notified of impending electricity supply disconnections to their factories.

“Our members have been served bills reflecting the increase and some have been informed that electricity supply to their factories will be cut off.

This is rather unfortunate and does not demonstrate the willingness to engage manufacturers with a view to arriving at a mutually beneficial outcome”, Kadri said.

Last Thursday, a panel of NERC adjourned its verdict on the petition by the Manufacturers Association of Nigeria, MAN, indefinitely.

The Vice-Chairman of NERC, who doubles as chairman of the panel, Dr Musiliu Oseni, said that the commission would take some time to review the petition and come up with a fair verdict.

On their part, however, the counsel to MAN, Tola Oshodi, urged the electricity regulator to reverse the recently hiked tariff for Band A consumers, as it was inimical to the manufacturing sector.

“We are here to appeal. MAN was not given an opportunity to make representation before the new tariff was fixed.

“MAN is recognized in the guidelines as a stakeholder that must be engaged before such decisions, but it never happened. The provision for stakeholders’ engagement was not complied with.

“We appeal that the new tariff should be suspended as we go through the process of engagement”, he said.

* Fraudulent deductions running into billions at the core

* Unlawful withdrawals spanning several years

By David Maxwell 

As Nigerians groan continually over fraudulent deductions, unlawful withdrawals and other illicit activities on their bank accounts, many have expressed an array of opinions over the sudden discovery that even the bank accounts of the supposed high and mighty are not spared.

This shocking discovery came to the fore with the revelation of one of Nigeria s wealthiest billionaires and oil magnate, Femi Otedola, is currently involved in a legal war with Zenith Bank Plc, one of the country’s biggest commercial banks.

Efforts to settle the differences have proved futile even after a series of meetings between the technical teams of Zenith Bank and Zenon Oil, including a notable one one one meeting held on May 20, failed to yield any favourable resolution. The frustration was palpable, with insiders lamenting Zenith Bank’s lack of sincerity and signaling a pivot to a full-blown legal assault.

At the heart of the matter are letters of credit that Zenon claims deteriorated into a problematic loan acquired by AMCON. Zenon alleges that these were improperly opened after AMCON had already assumed control, a move considered highly unprofessional. Documents reviewed by various media outlets reveal that Zenon’s debt, pegged at N39 billion during AMCON’s intervention, was allegedly inflated to N49 billion by Zenith Bank, though a final negotiation saw AMCON settle the matter at N44.1 billion.

Adding to the turmoil, Mr. Otedola, along with several of his companies—Zenon, Seaforce Shipping, Luzon Oil & Gas, and Garment Care Limited—secured interim injunctions against Zenith Bank and its affiliates, preventing the bank from trading their shares or distributing dividends pending further court rulings. These legal actions thus exposed the profound mistrust and high stakes involved.

Seaforce Shipping’s scrutiny of Zenith Bank’s statements revealed what they described as “blatant fabrications.” They alleged that the bank falsely claimed Seaforce owed N5.9 billion as of February 2024, only to backtrack when confronted with evidence showing a credit balance dating back to 2018. This revelation fuels the broader narrative of alleged deceit and fraud perpetuated by the bank.

In a dramatic turn, responding to Mr. Otedola’s petition detailing unauthorised debits from Zenon’s account, the Police has summoned the Managing Director, MD, of Zenith.Bank. The letter from the police lays bare the core of the dispute: an unauthorised withdrawal of over N205 million in 2011, compounded by illicit letters of credit opened post-AMCON takeover. 

This summons adds another layer of intensity to the ongoing saga.

The unfolding drama shows that this is not just a mere financial disagreement, but a high-stakes battle suggestive of the power dynamics within Nigeria’s corporate and financial sectors. The resolution, whether through the courts, regulatory bodies, or public opinion, will undoubtedly shape the landscape of Nigerian banking and corporate governance for years to come.

For many ordinary Nigerians, this not only confirm their growing lack of trust in the country’s banking sector, but that it has exposed the fraudulent activities of Nigeria’s commercial banks.

Speaking to our correspondent, Abdulazeez Adejo, a prominent gold dealer at the Lokoja International Market, decried his repeated experiences with Nigerian banks: “When my nephew brought the legal tussle between Otedola and Zenith Bank to my notice, All I said was ‘so these things happen to the high and mighty too?’ 

“You see, if you talk to about ten traders in this market, at least seven of them will tell you how the various banks have been debiting their accounts without their knowledge. This has made me close my account with three of my banks because theirs is worse. Even the two I now operate, it’s only because they are not as bad as the other three, plus it is now very very risky to either carry or keep cash at home. Otherwise a vast majority of Nigerians would have stopped operating bank accounts.

“The situation is very discouraging but maybe for the big names like Otedola and his his big-time players like Zenon Oil, Seaforce Shipping, Luzon Oil & Gas, and Garment Care Limited now in battle with Zenith Bank, it would. exoose the rot in the banking sector and reduce the unilateral deductions from the accounts of the struggling customers.”

To many, Otedola remaining fixed on vindication would make many heave a sigh of relief from indiscriminate deductions from meagre and feable bank accounts and their holders.

“I think the outcome of this epic battle would mean justice for many ordinary Nigerians who do not have the means of even speaking up against the injustices metted out to them by the very banks they entrust their monies with,” Mama Oche, a trans border trader said.

For Hadiza Lukman, an unemployed graduate of Biochemistry from the Kogi State University, “this will bring to the frontburner the silent suffering of countless individuals who have been deprived of their dignity, respect and their source of living by a system that preys on the vulnerable and the oppressed.”