Published On: Mon, Oct 21st, 2019

FG secures $3bn World Bank loan for power sector

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  • Orders MTN to suspend planned charges on bank services

By Etuka Sunday

Despite spending N1.5trillion on the nation’s power sector, the Federal Government has secured a fresh $3billion (N915billion) World Bank loan for the expansion of the transmission and distribution networks in the sector.
The approval was given yesterday after a series of meetings held between the officials of the Federal Government led by the Minister of Finance Zainab Ahmed and officials of the World Bank.
This is just as the Federal Government has directed the telecom firm, MTN, to suspend its plan to impose a new charge on customers who use its short codes to access banking services.
This came after a viral text message allegedly sent by the Mobile Network Operator MTN Nigeria and other Mobile Operators notifying subscribers of a four naira (N4:00) charge per 20 seconds on USSD access to banking services from the 21st of October 2019.
“Yello, as requested by your bank, from Oct. 21, we will start charging you directly for USSD access to banking services. Please contact your bank for more info(rmation),’’ the message said.
Ahmed who confirmed the World Bank loan while addressing journalists at the annual meetings of the World Bank/International Monetary Fund in Washington DC, said, the loan would be disbursed in four tranches of $750m each beginning from next year.
The loan, according to her would cover the funding gap as well as the current tariff which investors in the sector had described as very low compared to what is obtainable in other countries.
The minister said, “This financing will cover the gap between the current tariff and the actual cost of generating electricity.
“It will also enhance our ability to pay previous obligations in the sector that has crystallised so that investors in the sector can go on with expanding investments in the sector.”
She said, some portion of the loan will be for the transmission network, adding that if the government can expand the facility to $4bn, then the additional $1bn will be used for the distribution network.
“The distribution sector will be at the backend when the other reforms have been carried out.
“It will be a loan to the distribution companies because they are owned by the private sector,” she added.
On MTN, Minister of Communication, Isa Pantami in a statement on Sunday, said his ministry was unaware of the plan and had directed the regulator, Nigerian Communications Commission, to suspend it.
The statement reads,”The attention of the Federal Ministry of Communications has been drawn to the viral text message allegedly sent by the Mobile Network Operator MTN Nigeria and other Mobile Operators notifying subscribers of a four naira (N4:00) charge per 20 seconds on USSD access to banking services from the 21st of October 2019.
“The office of the Honourable Minister of Communications Dr Isa Ali Ibrahim Pantami FNCS, FBCS, FIIM is unaware of this development and has hereby directed the sector regulator, the Nigerian Communications Commission (NCC) ensures the operator suspends such plans until the Honourable Minister is fully and properly briefed.”
Also yesterday, the Central Bank of Nigeria (CBN)’s Governor, Mr Godwin Emefiele opposed the current plans by the Mobile Network Provider in the country to charge their subscribers for Unstructured Supplementary Service Data (USSD) access to banking services from Oct. 21.
Emefiele who was quoted to have given the bank’s position at the sidelines of the just-concluded World Bank/IMF Annual Meetings, in Washington, said, about five, four months ago, he held a meeting with some telecom companies as well as the leading banks in Nigeria at Central Bank, Lagos.
“At that time, we came to a conclusion that the use of USSD is a sunk cost. What we mean by a sunk cost is that it is not an additional cost on the infrastructure of the telecom company.
“But the telecom companies disagreed with us, they said it is an additional investment on infrastructure and for that reason they needed to impose it.
“I have told the banks that we will not allow this to happen. The banks are the people who give this business to the telecom companies and I leave the banks and the telecom companies to engage.
“I have told the banks that they have to move their business, move their traffic to a telecom company that is ready to provide it at the lowest possible, if not zero cost.
“And that is where we stand, and we must achieve it,’’ he said.

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