- NCAA to expend over N8bn on local, foreign trips in 2024
Telecommunication companies in Nigeria spent about N429.43bn on fueling base stations in 2023.
This shows an increase of 34.57 per cent from the N319.11bn they spent in 2022.
Diesel prices soared in 2022 and remained at an elevated level in 2023.
In 2022, the telecoms industry noted, “The telecommunication industry has been heavily financially impacted following Nigeria’s economic recession in 2020 and the effect of the ongoing Ukraine/Russia crisis. This has resulted in an increase in energy costs (which constitutes an appreciable 35 per cent of ALTON’s members’ operating expenses).”
Since then, diesel prices have risen from N288.09 per litre in January according to data from the Nigerian Bureau of Statistics to N1126.69 per litre in December 2023.
The rise in the cost of diesel has been blamed on foreign exchange challenges, rising cost of crude in the international market, and the implementation of a 7.5 percent VAT on the product.
Based on industry data, telecommunication operators use an average of 40 million litres of diesel per month to power 127,294 base stations.
A breakdown of the consumption analysis revealed that the cost for these operators in January 2023 at N828.82/litre was N33.15bn.
It was N33.48bn in February (N836.91/litre); N33.63bn in March (N840.81/litre); N33.69bn in April (N842.25/litre); N33.77bn in May (N844.28/litre); N32.63bn in June (N815.83/litre); N31.78bn in July (N794.48/litre); N34.17bn in August (N854.32/litre); N35.63bn in September (N890.80/litre); N40.19bn in October (N1004.98/litre); N42.22bn in November (N1055.57/litre); and N45.07bn in December (N1126.69/litre).
As of the end of 2022, the Nigerian Communications Commission disclosed that there were a total of 34,862 towers and 127,294 Base Stations in the country.
In 2022, the telecoms industry spent N2.09trn on operational costs (a large percentage of this cost is diesel tied).
Since 2022, telecom operators have been lamenting about the negative impact of rising diesel costs on the business. They made it the basis of a tariff review request to the NCC in 2022.
In 2022, the Association of Licensed Telecom Operators of Nigeria asked that the NCC allow it to raise tariffs by 40% because of the surge in the price of diesel.
It said, “Given the state of the economy and the circa 40 per cent increase in the cost of doing business, we wish to request for an interim administrative review of the Mobile (Voice) Termination Rate for Voice; Administrative Data floor price and cost of SMS as reflected in extant instruments.”
The floor price of calls would have jumped from N6.4 to N8.95 and the price cap of SMS from N4 to N5.61 if the request was approved.
When prices of diesel continued to soar in 2023, the Head of Operations, ALTON, Gbolahan Awonuga, declared that, “Power is key, it determines everything. Even though there is an increase in virtually the price of everything in the economy, telecom tariffs remain the same. This means that there are a lot of difficulties. Revenue has reduced and prices of other inputs have changed, but tariffs are still the same.”
The President of ALTON, Gbenga Adebayo, also said that, “For our industry to remain sustainable, our prices have to reflect the cost of production. This goes without saying that we will also review rates at the appropriate time after consultation with all the stakeholders to reflect the current cost of inputs.”
“Based on industry data, telecommunication operators use an average of 40 million litres of diesel per month to power 127,294 base stations.”
In an appeal to the House of Representatives, the telco operators decried how rising inflation, currency devaluation, sustained difficulty in accessing foreign exchange at an affordable rate, rising energy costs, the rising cost of securing telecom facilities and field personnel in the face of worsening insecurity, and more are negatively impacting their businesses.
The telcos said, “Notwithstanding the foregoing, the pricing regulatory framework has not been reviewed to account for changes in macroeconomic conditions and reflect current cost profile of operators. As such, ALTON’s members are unable to price services at a sustainable rate.
“Consumer prices in other sectors have seen a steep rise over the last six years as they adjust to reflect macroeconomic realities.”
NCAA to expend over N8bn on local, foreign trips in 2024
In another development, the Nigerian Civil Aviation Authority has said it will spend N8.3bn on transportation and travels in 2024.
The agency disclosed this in the Government-Owned Enterprises budget proposal submitted to President Bola Tinubu recently.
In the 2024 national budget, the Federal Government proposed N1.7trn for statutory transfers, N8.7trn for recurrent expenditure, while N9.9trn was allocated for capital expenditure
According to the GOE, the NCAA projected N372.22bn revenue and plans N272.87bn expenditure.
The regulator proposed to spend N8, 342,547,767 from the proposed expenditure on “travels and transport”.
Further, the GOE showed that N3, 310,009,756 was earmarked for “local transport and travels for training” while international transport will cost N4, 317,070,233.
The document also stated that the NCAA budgeted N715, 467,778 for “local travels and others” and plans to pay N1, 935,000,000 as a contribution to international organisations.
Other expenditures contained in the proposed budget include the purchase of vehicles (N3,000,000,000), purchase of furniture and office fittings (N1,352,997,000), construction of office building (N3,970,000,000), and provision of electricity (N1,205,000,000).
The agency also said it will spend N1bn on airport maintenance of physical assets and facilities.
The NCAA is the regulatory body for aviation in Nigeria. It became autonomous with the passing into law of the Civil Aviation Act 2006 by the National Assembly and the assent of the President of the Federal Republic of Nigeria.
Civil aviation is a critical element in Nigeria’s transportation system and indeed its economy.
According to data on the NCAA website, Nigeria has 20 airports and many regulated airstrips and heliports; 23 active domestic airlines; 554 licensed pilots; 913 licensed engineers and 1700 cabin personnel.
