General
COVID-19: Consumer Goods Sector Hardest Hit—FBNQuest Survey
By Modupe Gbadeyanka
**Says Income Levels Down 30%
The income levels of consumers in Nigeria are down by an average of 30 percent since March 2020, while job opportunities are fast disappearing, a survey has revealed.
The study conducted by REACH Technologies, a Nigeria-based fintech, on behalf of FBNQuest, corroborates findings from the National Bureau of Statistics (NBS) COVID impact survey that consumers have fallen on harder times.
Another sticking point is that consumption of non-essentials has been cut drastically, with respondents stating that they have reduced spending on higher value category items by about 22 percent since about three months ago.
Although, overall consumption has reduced since the pandemic started, the least spending cuts were made on food and health, which respondents viewed as most essential.
It is now becoming clear that the consumer goods sector is among the hardest hit by the economic crisis brought about by the COVID-19 pandemic.
The fragility of household wallets has been laid bare, with statistics now pointing to even weaker consumer sentiments.
The knock-on effect of fading demand and weaker oil prices are also stifling earnings of consumer goods companies.
The market has responded sharply to these challenges by marking these companies down. Year-to-date, the consumer goods index is down -28% – the worst performing index, behind the broad market index’s -7 percent.
The consumer companies have also entered an exceptionally tough phase. Following the crude price collapse in March, accessing foreign exchange at higher interbank rates made obtaining raw materials more challenging.
The companies are only able to obtain dollars at rates of around N360-390/$ relative to N330-360/$ pre-oil collapse.
That aside, given that consumer wallets are under pressure, passing on price increases to combat heightened competition comes at a great cost.
Among the publicly-listed companies, Q2 results – most of which will have been published by late July) – will reflect more of the COVID-related challenges, given that the lockdown took effect in late March.
The other pressure point expected to be seen comes from FX losses booked by the listed companies in their financial statements as a result of the currency depreciation.
Essentially, information provided by REACH confirms that consumer sentiments have turned sourer, with only 3 percent of respondents claiming that they are benefiting from the pandemic.
More recently, the VAT increase in February and an impending hike in electricity tariffs potentially tightens the squeeze on disposable incomes further.
An acute downturn in spending is therefore increasingly likely this year. The IMF projects a GDP contraction 3.4 percent in 2020, while the labour ministry expects unemployment to rise to levels above 33.5 percent from 23 percent in Q3 2018 (last publication). Indeed, recent media reports are already pointing to job losses in key sectors.
A few sectors have gained considerable ground on the back of the pandemic. In this regard, the telecoms sector comes to mind considering that increases in remote communications and internet entertainment drove demand for data.
The consumer goods sector in marked contrast finds itself in the unenviable position of being hit hard. That said, investors need to ensure that their consumer goods exposures are tilted in favour of companies like Nestle Nigeria, which has a proven track record of handling this level of pressure based on historical precedent.
By Adedapo Adesanya
The federal government has reaffirmed that electricity meters being deployed under the Distribution Sector Recovery Programme (DISREP) are free for customers, warning Nigerians not to pay any money for meter supply or installation.
The Director General of the Bureau of Public Enterprises (BPE), Mr Ayodeji Ariyo Gbeleyi, stated this in Abuja at a joint media briefing on DISREP with the managing directors of Nigeria’s 11 Electricity Distribution Companies (DisCos). DISREP is financed through a $500 million World Bank facility.
The DG said the concessional nature of the funding, which comes at single-digit interest rates, makes it more sustainable than commercial borrowing and supports long-term stability in the power sector.
Under the DISREP IPF, 3.2 million smart meters are being procured and installed nationwide over four years through competitive international and local bidding. According to him, close to 700,000 meters have already been delivered, while about 200,000 have been installed across different DisCos.
The DG said, “With DISREP and other Federal Government interventions, the journey to power sector reliability is underway. DISREP is not just a short-term intervention, but part of a broader and coordinated plan of the Renewed Hope Agenda of President Bola Ahmed Tinubu, GCFR, towards building a financially viable and service-oriented electricity market
“Nigerians deserve a power sector that works, one that delivers reliable electricity, protects consumers, ensures value for money, and supports economic growth.
“Together, we shall achieve that! The supply and installation of these meters for customers is free.
It was also disclosed that the government had already paid the contractors to supply and install the meters. DISREP is integrated with other metering initiatives, including the Presidential Metering Initiative and the Meter Acquisition Fund, to accelerate the closing of Nigeria’s metering gap.
On his part, the Managing Director of Abuja Electricity Distribution Company, Mr Chijioke Okwuokenye, warned customers not to pay for meters.
“These meters are to be deployed and installed freely. Anybody asking you to bring money should be reported,” he said.
MD of Eko Electricity Distribution Company (Eko Disco), Mrs Wola Joseph-Condotti, said the company is working closely with the authorities to weed out bad eggs who extort money from customers for meter procurement and installation.
The programme offers significant benefits to consumers, including the removal of upfront meter purchase and installation costs, accurate billing, the elimination of arbitrary estimated billing, improved service accountability by DisCos, better transparency and dispute resolution, and long-term improvements in supply reliability as the sector becomes more financially viable.
For DisCos, Mr Gbeleyi said DISREP provides access to concessional World Bank financing for metering and network upgrades, reduces Aggregate Technical, Commercial and Collection (ATC&C) losses, improves liquidity and revenue assurance, and strengthens operational performance for long-term investment.
He disclosed that $250 million of the facility is dedicated to Investment Project Financing, which supports bulk procurement of the 3.2 million smart meters, deployment of Meter Data Management Systems, and provision of technical assistance and capacity-building programmes to strengthen DisCos’ operations and processes.
Describing DISREP as a landmark transaction, Mr Gbeleyi said it is the first initiative of its kind in which the government, beyond investing in distribution network infrastructure, is deploying meters at scale to bridge the country’s metering gap. He cited official figures showing that Nigeria currently has about 5.66 million unmetered electricity customers.
“The plan is to quickly close that gap. These meters are for everybody. They are for Nigerians. Priority is on unmetered customers,” he said.
He clarified that while the policy targets unmetered customers, DisCos have been allowed to deploy up to 20 per cent of the meters to replace faulty or technologically obsolete units, following feedback from the field.
By Adedapo Adesanya
The Nigerian Shippers’ Council (NSC) has successfully concluded the review of the Port Service Support Portal (PSSP) application, which is aimed at ensuring seamless handling and efficient resolution of stakeholders’ commercial disputes across the maritime sector.
The Head of NSC-ICT, Mr Benjamin Ivwigheghweta, and his team; the Head of the Complaints Unit, Mr Bashir Ambi and his team; as well as consultants from BrandOne, all collaborated to complete the platform’s final implementation stage.
Mr Ivwigheghweta expressed satisfaction with the successful integration of the revamped PSSP for streamlined dispute resolution. He encouraged the team to fully engage with the new system and to ask questions where necessary, ensuring that every member is well equipped to meet stakeholder needs with precision and efficiency.
On his part, Mr Ambi applauded the deployment of the PSSP as a tool for accelerating grievance resolution, adding that the platform would significantly strengthen the council’s dispute resolution framework by promoting transparency, boosting stakeholder confidence, and generating reliable, data-driven records to support national economic growth.
He further commended the ICT team for its unwavering support-particularly in ensuring extended network availability to support the Unit’s after-hours operations.
Describing the PSSP as a critical modern upgrade for dispute resolution, Mr Ambi revealed that the Council’s operations are now about 90 percent digital. “We rely heavily on electronic platforms to serve our stakeholders,” he said, adding that the ICT Unit has remained the backbone of these efforts by providing consistent support, even over weekends, to ensure uninterrupted online service delivery.
This digital-first approach, he noted, keeps the NSC at the forefront of maritime efficiency.
Following a productive three-hour technical review and interactive question and answer session, the PSSP is now in its final phase.
The next steps include the configuration of individual user access by the ICT Unit and a live demonstration of the platform to Management. Upon completion of these tasks, the council will be ready to go live-ushering in a new era of digital efficiency in port service delivery.
The Port Service Support Portal was officially launched by the former Vice President, Mr Yemi Osinbajo, in June 2016 in Abuja. The launch was held alongside the unveiling of the Port Harmonized Standard Operating Procedures (SOPs). The portal was designed as an online, real-time platform to enhance service delivery, address stakeholder complaints, and curb corruption at Nigerian ports.
By Adedapo Adesanya
President Bola Tinubu has deployed an army battalion to Kaiama district in Kwara State after suspected jihadist fighters killed about 170 people in an overnight attack on Tuesday.
The terrorists stormed Woro and Nuku communities in Kaiama Local Council, according to Kwara State lawmaker, Mr Saidu Ahmed.
The violence highlights fears that jihadist factions prevalent in Northern Nigeria are pushing south along the Niger-Kwara axis toward the Kainji forest.
According to a statement from the Presidency, the new military command will spearhead Operation Savannah Shield to checkmate the barbaric terrorists and protect defenceless communities.
He condemned the attack as “cowardly and barbaric,” saying the gunmen targeted villagers who had rejected attempts to impose extremist rule.
“It is commendable that community members, even though Muslims, refused to be conscripted into a belief that promotes violence over peace,” President Tinubu said in the statement.
The President urged collaboration between federal and state agencies to provide succour to members of the community and ensure that those who committed the atrocities do not go scot-free.
President Tinubu prayed for the repose of the souls of the deceased and condoled with those who lost family members as well as the people and government of Kwara State.
Similarly, suspected bandits stormed Doma community in Tafoki Ward, Katsina State, on Tuesday afternoon, killing several residents, injuring many others and setting vehicles and houses ablaze.
There were conflicting figures over the casualty toll, with police putting the number of deaths at 13, while the executive chairman of Faskari Local Council estimated more than 20.
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