09 Dec

Daily Watch – DisCos warn of imminent collapse, Lagos gives tax deadline

  • The eleven power distribution companies in the country have declared that the Nigerian electricity industry is on the verge of collapse as a result of the poor tariffs being charged consumers. Although they did not call for an increase in the electricity tariffs, the Discos warned that the sector was under grave threat on account of various operational challenges occasioned by the exorbitant and unstable naira to dollar exchange rate. Meanwhile, NERC has fined the Transmission Company of Nigeria ₦47.6 million for various regulatory breaches. NERC says TCN failed to submit its audited financial reports, in the process violating Section 63 (1) of the Electric Power Sector Reform Act, 2005, which stipulated that “a licensee shall comply with the provisions of its licence, regulations, codes and other requirements issued by NERC from time to time.” TCN has up to two weeks from December 2, 2016 when the disciplinary order was signed by its acting Chairman, Tony Akah; and the General Manager, Legal, Licensing and Enforcement, Olufunke Dinneh, to pay up. The fine would attract a five percent interest each day after the due date.
  • The FG has said it was looking the way of the IMF and the World Bank for some of its external borrowing. According to the government, both institutions have some “concessionary terms” attached to borrowing packages. Minister of Budget and National Planning, Senator Udo Udoma, told the Assistant Secretary for Multilateral Affairs of the Trade and Policy Department at the French Treasury, Mr Guillaume Chabert, that “the stimulative effect of investing in infrastructure was enormous and was the surest way of setting the country on the path of growth and sustainable development.” Udoma also said that the FG is working on a National Economic Recovery and Growth Plan, which is tailored to move the country’s economy out of recession and set it on a growth path. “Our plan is that we should be able, within that plan period (2017– 2020), to achieve not less than 7% growth. Udoma’s statement came as the DMO said, yesterday, it had raised the ₦1.18 trillion, which is the domestic component of the 2016 budgeted borrowing.
  • WTI Crude experienced a sharp selloff during trading on Wednesday with prices dipping below $50 as concerns heightened over OPEC’s record high output for November. Bearish investors were offered further encouragement to drag prices lower after reports of crude oil inventories rising rekindled anxieties over the excessive oversupply in the global markets. Investors have started to digest the painful OPEC reality with the fading positive effects of last week’s unexpected production deal exposing Oil to downside risks. Scepticism and pessimism have already heightened over OPEC’s ability to fulfil the 32.5 mbpd production ceiling in January while there are some fears over the success of the pending OPEC and non-OPEC meeting tomorrow.
  • The Lagos state Internal Revenue Service has given all taxpayers in the state a 16-day grace period to pay their taxes, after which prosecution will begin. Monsurat Amasa, the head of corporate affairs of the agency, said tax defaulters are encouraged to remit all overdue taxes/levies due in December to avoid prosecution. The grace period, which began on December 1, would lapse on December 16. The taxes and levies expected to remitted during the grace period are: Tax audit liability of back years, Personal income tax (PAYE, Direct assessment, self-assessment), Withholding Tax, Hotel occupancy and restaurants consumption tax and Land use charge and Ground rent.