The Nigerian telcos got a great new year present even as the Nigeria Labour Congress condemned the 50% hike “The Nigeria Labour Congress (NLC) has fiercely condemned the recent 50% tariff hike approved by the Nigerian Communications Commission (NCC) for telecommunications operators, calling it an “assault on the welfare of Nigerians.”’

But no matter how you see it, the telcos deserve this increase because those equipment are not fabricated in Umuahia, Sokoto, Jos or Ibadan. Yes, they are imported into Nigeria with USD dollars, and not Naira. With the fading of Naira, this recalibration makes sense! Sure, expect court cases as many will disagree with me.

But this price hike will not end with the telcos; expect online streamers, cinemas, and everyone to “top and collect”, because that is where things are right now. Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC)  is aligned that prices should increase, even though it expects the companies to offer improved services. Lol.

NCC which sees the operating logs and books of these companies saw the increase as a ‘The NCC, in its defense, described the hike as a “rationalized adjustment” meant to address the surging operational costs faced by telecom operators due to inflation, foreign exchange volatility, and insecurity. It argued that the 50% increase was more measured than the over 100% initially proposed by operators.’

And there lies the confession I was expecting because a bird which flies from the ground only to perch on the ant-hill is still very much on the ground. The federal government of Nigeria is no longer absorbing subsidy costs, foreign exchange costs, etc, but that does not mean those costs have gone. Do you know what happened? The costs moved from the public purses to corporate purses, and after adjustments, those companies will ask you to pay up!

Yes, these costs cannot be eliminated by moving them from the government to companies. You only take them out by providing practical alternatives or substitutes. Otherwise, nothing is changing. In short, it is even more effective if the government absorbs these costs as it could be more optimized unlike where companies are applying the rules in any way they like. As the debate continues, MTN, Glo, Airtel, etc don top and collect? And if you sell things, you dey top and collect also. Now, you know who is paying for subsidies!

In a year marked by widespread economic uncertainty in Nigeria, Transcorp Power Plc has emerged as a beacon of resilience and growth. The company, a subsidiary of Transnational Corporation Plc, demonstrated remarkable financial performance in its fiscal year 2024, defying the economic downturn that has gripped many sectors of the Nigerian economy.

Transcorp Power reported an impressive 115.27% year-on-year (YoY) increase in revenue, which soared to N305.9 billion. Profit before tax also experienced significant growth, rising by 114.71% YoY to reach N113.287 billion.

This performance is seen as an indication of Transcorp Power’s role as one of Nigeria’s most formidable energy operators. It contributes over 20% of the country’s installed electricity capacity through its gas-fired power plants in Ughelli and Afam, with a combined capacity nearing 2,000 megawatts.

Demonstrating its commitment to rewarding shareholders, the Board of Directors proposed a final dividend of N3.50 per share. When added to the interim dividend of N1.50 per share declared at mid-year, this brings the total dividend for the 2024 fiscal year to N5.00 per share.

The company’s growth story is even more significant when viewed through the radar of Nigeria’s current economic realities, where businesses have been grappling with rising costs, inflation, and currency volatility.

Drivers of Growth

Transcorp Power’s revenue growth was driven by increased energy deliveries, which accounted for over 67% of total revenue. This surge in energy sales, coupled with operational efficiencies, allowed the company to maintain robust profitability despite facing a 145.48% YoY increase in the cost of sales, primarily due to rising natural gas and fuel expenses.

The company also reported a significant improvement in its financial stability. Following the full repayment of its USD loan, its gearing ratio dropped from 64.48% in 2023 to 29.70% in 2024. This substantial reduction in leverage not only strengthens the company’s balance sheet but also positions it for future growth and investment opportunities.

Return on assets increased from 13.53% in FY 2023 to 20.17% in FY 2024, while return on equity rose from 52.25% to 63.19%. These metrics highlight Transcorp Power’s efficiency in utilizing its resources to generate income, reinforcing its reputation as a well-managed entity in a turbulent economy.

Chairman Emmanuel N. Nnorom lauded the company’s resilience and its role in addressing Nigeria’s energy challenges. He said, “Transcorp Power has become one of Nigeria’s most formidable power operators, committed to bridging the energy gap in the country and contributing to the nation’s economic growth. This financial performance reflects our unwavering commitment to our shareholders and stakeholders. We remain steadfast in our pursuit of value creation and assure our investors of continued robust returns.”

Chief Executive Officer Peter Ikenga attributed the company’s success to its strategic investments and disciplined approach to operations.

“Transcorp Power is dedicated to financial discipline and delivering unparalleled value to our stakeholders. Since our public listing, we have maintained consistent growth across all financial metrics, aligning with our mission to deliver value. We are confident in our ability to sustain this trajectory of success,” he stated.

Defying Economic Headwinds

Transcorp Power’s achievements stand out in a year when many companies in Nigeria have struggled under the weight of economic pressures. The company has not only weathered the storms but has also expanded its footprint and strengthened its financial position.

The company has remarkably focused on enhancing electricity supply, driving economic growth, and creating value for Nigeria. This reflects a growth strategy that aligns with the country’s urgent need for reliable energy infrastructure.

Some analysts note that Transcorp Power Plc’s success in FY 2024 is not just a financial milestone but also a symbol of hope in a difficult economic landscape, demonstrating that with the right strategies, companies can thrive even in the most challenging times.

The Nigeria Labour Congress (NLC) has fiercely condemned the recent 50% tariff hike approved by the Nigerian Communications Commission (NCC) for telecommunications operators, calling it an “assault on the welfare of Nigerians.”

Similarly, the Socio-Economic Rights and Accountability Project (SERAP) has issued a stern warning to the federal government, threatening legal action if the hike is not reversed.

The approval, which raises call rates from N12 to N18 per minute, SMS charges from N4 to N6, and data costs from N300 to over N400 per gigabyte, has sparked intense debate among stakeholders, consumer advocacy groups, and ordinary Nigerians. The NLC and SERAP argue that the increase further burdens already overstretched consumers, many of whom are grappling with declining purchasing power amid the country’s severe economic challenges.

In a statement signed by NLC President Joe Ajaero, the labor movement described the hike as “ill-advised,” urging the federal government, NCC, and the National Assembly to halt its implementation. Ajaero noted that the increase disproportionately affects the average Nigerian worker, who already spends approximately 10% of their wages on telecommunication services.

“For a worker earning the current minimum wage of N70,000, this means an increase from N7,000 to N10,500 per month—15% of their salary—a cost that is unsustainable,” the NLC stated.

The union accused the government of prioritizing corporate profits over citizens’ welfare, highlighting the rapid approval of the tariff hike in contrast to the delay in approving the new minimum wage.

“This hike exemplifies the government’s apparent ease in siding with corporate interests rather than addressing the needs of its citizens. We call on Nigerian workers to prepare for collective action, including the possibility of a nationwide boycott of telecommunication services, to compel a reversal of this punitive increase,” the NLC added.

SERAP Threatens Legal Action

The Socio-Economic Rights and Accountability Project (SERAP) has also voiced strong opposition, warning the government to reverse the increase or face a lawsuit.

“The Tinubu administration and telcos must immediately reverse the unlawful increase in calls and data costs. We’ll see in court if the 50% tariff hike is not reversed within 48 hours,” SERAP declared in a statement.

FCCPC and NCC Defend the Hike

In response to the backlash, the Federal Competition and Consumer Protection Commission (FCCPC) stressed the importance of ensuring the tariff increase leads to tangible service improvements.

“Consumers can expect a mandatory disclosure table from their service providers, enabling them to make informed decisions without worrying about unexpected charges,” said Ondaje Ijagwu, FCCPC Director of Corporate Affairs.

The NCC, in its defense, described the hike as a “rationalized adjustment” meant to address the surging operational costs faced by telecom operators due to inflation, foreign exchange volatility, and insecurity. It argued that the 50% increase was more measured than the over 100% initially proposed by operators.

Telcos Caught in the Middle

The development is a reflection of the precarious situation of Nigeria’s telecommunications operators, caught between consumers’ dwindling purchasing power and operational losses. Industry proponents argue that inflation, which has surged from 9% a decade ago to over 30% today, alongside high diesel costs and insecurity, has made business unsustainable.

Speaking on the issue, President of the Association of Telecommunications, Information Technology, Cable Satellite Network Operators and Allied Services Employers’ of Nigeria (ATICEN), Adede John Williams, emphasized the sector’s significant contributions to Nigeria’s economy.

“The telecommunications sector plays a pivotal role in driving foreign direct investment and GDP growth. Collaborative efforts between consumers and operators are essential to ensure sustainable development in the sector,” Williams said.

A legal expert, Frank Tietie, criticized the NCC for failing to hold public inquiries as stipulated under Sections 57 and 58 of the NCC Act.

“There must be public hearings where consumers can represent their grievances and demand accountability. Nigerians deserve a platform to question poor service quality and the lack of investment in sustainable energy alternatives like solar power,” Tietie said.

He dismissed the reliance on diesel as outdated, urging operators to explore green energy solutions. He also pointed to unresolved systemic issues, such as debts between telecom operators and banks over USSD charges, as inefficiencies being unfairly transferred to consumers.