Yesterday’s price is not today’s price
The cost of electricity just went up and it’s not coming down anytime soon
Happy Fri-yay! I’d say good morning but I’m not sure Band A customers will be in the mood for unnecessary greetings. It’s been a stressful week and I can’t wait to sleep the weekend away.
- Margaret
Word count: ~1000
Reading time ~ 4 mins
Let’s get into today’s edition:
Power distribution companies announce another tariff hike for Band A customers
Lagos government blames flooding on forces of nature
Nigeria set to impose 7.5% tax on crypto transactions
The Big Deal
Power distribution companies announce another tariff hike for Band A customers
Everything comes at a cost, especially 20 hours of electricity supply and the bragging rights that come with it. Nigeria’s electricity Distribution Companies (Discos) have increased the tariff for Band A customers from ₦206.80/kWh to ₦209.5/kWh just three months after the previous hike.
In April, Discos increased electricity prices from ₦68 to ₦225 per kilowatt-hour. This 230% hike wasn’t well received by the Labour Union which protested the reduction. Most Nigerians supported the union’s decision to lead the protest but they opted for more virtual means of expressing their criticism of the hike. The House of Representatives also kicked against the hike and they asked the Nigerian Electricity Regulatory Commission (NERC) to suspend it immediately. But all that came out of the protests, criticisms and senatorial order was a slight reduction of the tariff from ₦225 to ₦206.80/kWh on May 6.
The short-lived reduction has been reconsidered and distribution companies have decided to slightly increase the tariff again. But Band B, C, D, E and other bandless customers are expected to keep paying the regular fees.
Why is this a big deal?
The cost of living is getting crazier every day but the income of most Nigerians is still the same. The tariff hike will not only affect individuals, it will also affect businesses that rely on electricity for production or distribution purposes.
If you read Tuesday’s edition, you’ll know that business in Nigeria is currently at the lowest it has been in seven months. The purchasing power of Nigerians is declining, businesses are struggling to stay afloat and expenses like the hiked tariff are one of the factors responsible for this decline.
Godwin, a remote worker who is also a Band A customer, shared what life has been like since the first hike: “They’ve stayed true to their promise of 20-hours electricity but for the sake of my sanity, I turn the light off by myself for at least 6-hours every day. You don’t want to see what my electricity bill looks like. If I continue living like that, I’ll have no other choice than to move back to my village.”
Not to be prophets of doom but two hikes in three months is a strong indicator that there might be more hikes to come.
Lagos government blames flooding on forces of nature
When it rains, it floods (even in the most civilized parts of Nigeria). What started as beautiful morning showers on Wednesday ended up becoming the reason why millions of Lagosians weren’t able to go to work, school and every other important place they had to be.
Commuters who expected the rain to taper off found themselves trapped in traffic due to hours of heavy rainfall that disrupted movement in Nigeria's primary commercial hub.
The Lagos government has now apologised for the inconvenience caused “due to nature’s cause”.
Lagos has seen its fair share of floods, which is why many Nigerians took to social media to call out the government for its lack of flood prevention plans.
But the Lagos State Commissioner of Environment and Water Resources Tokunbo Wahab doesn’t particularly agree with the people’s opinion.
“It’s not for failure to plan that we had what happened yesterday,” Tokunbo said. “No, it was nature taking its full course. Nature will take its course. What we have to do is to mitigate the impact of nature on the environment. And that was what we did yesterday.”
But two truths can co-exist…
According to the United Nations University for Environment and Human Security, sea level rise causes the yearly floods in Lagos. However, the state's ability to cope with these floods reduces daily due to poorly maintained waterways and drainage systems. So if the Lagos government plans to keep blaming Mother Nature, the state is one heavy rainfall away from another disruptive flood.
Nigeria set to impose 7.5% tax on crypto transactions
Desperate times truly call for desperate measures or whatever the kids say these days. Nigeria is getting ready to let go of its long-lasting beef with the $56.7 billion crypto market by slapping a 7.5% tax on transactions.
Earlier in 2024, Nigeria got tough on crypto. The country went after platforms like Binance and accused the crypto platform of messing with the value of naira and authorising shady transactions from unknown sources amounting to $26 billion. Since then, the government has been moving like a crypto opp. But it seems the collapsing economy has fueled the government’s search for a side hustle.
Crypto platforms like KuCoin are set to start adding the 7.5% tax on transaction fees. KuCoin shared the announcement with its users, saying, "Starting July 8th, 2024, we'll be collecting a Value-Added Tax (VAT) of 7.5% on transaction fees for Nigerian users."
Nigeria's got one of the world's biggest peer-to-peer (P2P) crypto scenes, despite the government’s decision to place a potential ban on it earlier this year. According to Chainalysis, Nigerians did $56.7 billion worth of crypto deals between July 2022 and June 2023.
But the new tax has got people wondering if crypto's now fully legal in Nigeria. Some experts think Nigeria may be moving towards regulating the crypto industry because you don't tax something you don't recognize, right? But the Central Bank hasn't said much about it yet.
The Big Picks
FG Lists Flood-Prone States, Says Downpour May Worsen Cholera: The Federal Government has predicted that around 20 states would face severe floods in July and advised state governments to clear clogged drainages.
One Killed As Russia Strikes Ukraine’s Gas Facility: Yesterday, the Ukrainian energy ministry reported that a Russian airstrike on a gas facility in eastern Poltava resulted in one person killed and three others wounded.
If you enjoyed this edition of the newsletter, don’t forget to subscribe and share. You can also leave feedback for us in the comments or by filling out this form.