Gas producers lament power sector debt, low prices

 Gas producers in the country have said the debt owed by the power sector and the regulated low prices of the commodity constitute a drag on gas development.

Operators and other stakeholders, including the Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry and the Nigerian Gas Association, highlighted the need to address the challenges in the domestic gas market.

The Chairman, OPTS, Paul McGrath, said to realise the full benefits of gas as a catalyst for economic growth and diversification, several challenges across the entire gas value chain needed to be resolved.

According to him, the challenges include inadequate infrastructure along the value chain; regulated low prices, legacy debt related to gas and power supply and the challenging business environment.

“The commercial and financial structures of the gas-to-power commercial value chain remain weak with growing arrears and uncertainty in the payment system which disincentivises gas investors,” he said at NGA Business Forum in Lagos.

McGrath added, “To date, Nigeria’s domestic gas prices are kept at a regulated low price, which does not cover the cost required to fully develop its gas resources.”

He said of the 162 trillion cubic feet reported gas reserves in the country, about 75 per cent would require the building of new infrastructure to deliver the gas resources to the domestic market.

The OPTS boss said, “The current regulated gas price of $2.50 for one million British thermal units falls short of the price required to attract investment for these new gas developments.

“The gas sector should transit into a liberalised market based on the ‘willing buyer, willing seller’ principle and ensure the existence of a competitive fiscal regime to support upstream gas development.”

According to McGrath, Nigeria lacks sufficient pipelines to deliver gas from the fields where it is produced to the current and potential off-takers (e.g., power plants, manufacturers, etc.).

He said, “In addition, the transmission and distribution systems lack the capacity to deliver the generated electricity to businesses and other consumers. Building infrastructure requires a sustained joint effort of the stakeholders led by the government.”

He said active government support would help enable a stable investment climate, acceptable commercial terms and contractual risks, which would help in attracting the private investments required to strengthen existing off-takers and ultimately lead to emergence of new buyers and suppliers.

McGrath said, “For Nigeria, gas provides a unique opportunity to provide steady, widely-available, cost-effective and generally affordable power to everyone. A shift to gas-fuelled power generation would represent significant savings opportunities over sources such as diesel which is multiple times more expensive than gas at the current price of $2.5/mmbtu.

“Additional opportunity exists in leveraging gas to develop industries that use gas as feedstock, to produce methanol and ammonia used in fertiliser production.”

Citing Trinidad and Tobago as a good example of a country that had accomplished much with its gas resources, McGrath said, “With a small population of 1.4 million and only 11 Tcf of proven gas reserves, the country has developed a globally competitive petrochemicals industry.

“Today, Trinidad and Tobago is the world’s largest exporter of ammonia and second largest exporter of methanol leading to this industry contributing significantly to the country’s GDP. Nigeria, with significantly larger gas reserves, has the potential to achieve even bigger success.”

According to him, gas has a leading role as a key enabler to the diversification and growth of Nigeria’s broader economy through adequate power generation, provision of feedstock for value-adding manufacturing, and increased government revenue from Liquefied Natural Gas.

McGrath noted that the development of the nation’s vast gas resources and strengthening of the gas value chain should be a national priority.

“OPTS is well positioned to collaborate with the government and other stakeholders in this regard,” he added.

The President, NGA, Mrs Audrey Joe-Ezigbo, described gas development as critical in rapidly catalysing the attainment of the nation’s economic recovery and growth agenda.

She said, “The established correlation between the volume of gas consumed on the domestic front and the level of economic development of any nation provides the impetus for the current focus on growing our domestic gas industry.

“We must, as a nation, ensure we are more deliberate about gas-to-power, in-country value addition through gas-based industrialisation, and the building of local capacity if we are to rapidly impact positively on the socio-economic wellbeing and empowerment of our citizens.

“The world is counting on Nigeria to propel economic development using her natural gas resources as a catalyst. We recognise several strides that have been attained with Nigeria’s gas industry over the years but believe that the pace and scale of advancement must be rapidly accelerated in the interest of the entire nation.”

SEC Shifts Multiple Subscription Harmonization Deadline To Dec 2019

Mary-Uduk-Actng-DG-SEC-
Mary-Uduk-Actng-DG-SEC-

The Securities and Exchange Commission (SEC) said that the deadline on forbearance on holders of multiple accounts in the capital market had been extended to December 31, 2019.

It explained that the extension of the deadline, which was part of the decisions reached at the end of the 3rd Capital Market Committee’s (CMC’s) meeting held in Lagos, was aimed at ensuring that more investors regularize their accounts thereby reducing the volume of unclaimed dividends.

The commission had earlier announced December 31st 2018 deadline for regularization of multiple accounts.

Briefing journalists on the decisions taken at the CMC meeting during an interactive session, the Acting Director General of the SEC, Ms Mary Uduk,  explained that the committee considered the issue and decided it was the best option to give investors more time to regularise their multiple accounts in order to derive the benefits from their investments.

She expatiated “I am delighted to report that on the lingering issue of multiple subscriptions and forbearance for shareholders with multiple accounts, the CMC agreed that the forbearance window should be extended by another year from the December 31, 2018 deadline previously communicated.

“We expect investors to take advantage of this opportunity to claim their unclaimed dividends and bonuses”, Uduk added.

In addition, the industry expert announced a two-pronged approach to addressing the various challenges associated with transmission of shares related to the estate of deceased investors.

According to her, the first step will involve engagement with and enlightenment of the Probate Registry with a view to providing solutions to the cumbersome process of transmitting shares.

Secondly, Uduk hinted that rules would be developed around the time frame for transmission shares and the fee structure.

On identity theft menace in the investment market, the Acting DG said  that the Commission would collaborate with  other stakeholders in setting up a committee that will look into and proffer solutions to problems around identity management in the Nigerian capital market.

This is even as she hinted that the commission would begin to take enforcement actions against any person that engage in trading in the shares of public unlisted companies outside a recognised securities exchange as provided by the Rules as part of efforts to eliminate underhand dealings.

Speaking on the need to grow the market for trading in securities on unlisted public companies, Uduk said that the Commission was making concerted efforts in collaboration with CAC and other stakeholders to assist public companies that are yet to register their securities to do so without much difficulty.

She explained further: “In furtherance of the commitment to develop a vibrant Commodities eco-system, the Commission has commenced the implementation of measures to strengthen regulatory capacity by establishing a Commodities Division. Other recommendations of the Committee have been broken down into implementable plans with set timelines.

“An interesting development in the commodities sector is the innovative solution developed by AFEX Commodities Exchange Limited (AFEX) and its partners regarding the use of Blockchain Technology to streamline the process of financing agriculture to Smallholder farmers and other players in the commodities markets”, the SEC boss added.

 

NNPC records N17.16 billion trading surplus

The Nigerian National Petroleum Corporation (NNPC), has recorded  trading surplus of N17.16billion in April, 2018.

NNPC Group General Manager, Group Public Affairs Division, Ndu Ughamadu, who made this known in a statement, yesterday said the development was part of the highlight of the Corporation’s Monthly Financial and Operations Report for the review period.

The report, which is the 33rd edition since NNPC commenced the monthly publication of its financial and operations data as part of efforts to instill a culture of transparency and keep stakeholders, and the general public informed of its activities, indicated a N5.43billion improvement representing 46.29 per cent on the trading surplus recorded in the previous month of March, 2018.

According to the report released in Abuja, the trading surplus was achieved through a combined higher performance by the upstream, midstream (refineries) and downstream sectors, as well as a reduction in the Corporate Headquarters’ operational expenditure.

It said: “This enhanced performance is attributable to robust revenues from sales of crude oil and petroleum products by NPDC and PPMC as well as the upsurge in refineries’ performance, particularly in the Port Harcourt Refining Company (PHRC).”

On the gas production and supply front, it indicated that the average daily production for April, 2018, stood at 8,054.46 billion cubic feet (bcf), out of which an average of 835.27 million metric standard cubic feet (mmscf), equivalent of 3,283 megawatts of electricity, was supplied to the power sector daily during the review period.

“The result, when compared with that of April, 2017, implies an increase of 496mw of power generated relative to same period last year”, the report stated.

It further showed that in the period under review, a total of 1.61 billion litres of Premium Motor Spirit (petrol) was supplied by NNPC in furtherance of the zero fuel queue policy of the Federal Government.

The NNPC said it recorded a 48.21 per cent reduction in the rate of pipeline vandalism which fell to 166 from 224 vandalised points in the previous month.

According to the report, the Aba-Enugu pipeline segment accounted for 78 vandalised points, representing 84.78 per cent of total vandalised points on the nation’s network of products pipelines.

Meanwhile, the Department of Petroleum Resources (DPR) generated over N4trillion to the Federal Government coffers in the last five years, it was learnt yesterday.

The revenue exceeded the target of the organisation for the period of five years that ended in 2017.

Officials of the Planning Division of the DPR Assistant Director, Budget and Strategic Planning,  Steve Ayuba and the Accountant Planning Division,  Badmus Mustafa Amodu stated this on the Radio Nigeria, Half Hour, monitored by The Nation.

They expressed optimism that the future of the organization would be brighter and expected to exceed the present revenue generation profile.

Ayuba said: “If you look at the performance of the DPR from 2017. In oil revenue performance, you will find that the DPR has generate well over N4trillion to the Federal Republic of Nigeria in the last five years. In the next five years, projections are looking very bright and brighter than what we have done in the last five years and what the government expects of us.”

The DPR, according to him, collects all revenue for the federation, and it does not operate any account for itself.

Fresh sparring between Washington and Beijing over trade kept world stocks close to three-week lows on Wednesday, while a slight dollar pullback gave little respite to emerging markets, Indian rupee plumbied new record lows.

Oil prices extended to 80 dollars a barrel as Hurricane Florence advanced and U.S. sanctions started weighing on Iran’s exports.

Analyst said oil should be 100 dollars presently.

The months-long escalation in tensions between the world’s two biggest economies has shown no sign of letting up.

U.S. President Donald Trump said on Tuesday the United States was taking a tough stance with China. That cemented expectations that fresh levies on Chinese exports will soon be announced.

Trump’s comments came after China told the World Trade Organization (WTO) it wanted to impose seven billion dollars a year in sanctions on the United States in retaliation for non-compliance with a ruling in an earlier trade dispute.

Equity markets also faced pressure from U.S. two-year bond yields which touched a decade peak on Tuesday, partly spurred by data that provided yet more evidence of the U.S. economy’s strength.

That data pushed Wall Street to a strong close, led by tech and energy shares, but futures signaled U.S. shares opening flat. European stocks however firmed almost half a per cent, moving off recent five-month lows.

MSCI’s all-country equity index inched up marginally, looking to extend two sessions of modest gains that had snapped six straight days of losses. But emerging equities retreated to new 15-month lows.

Asian equities excluding Japan hit their lowest since July 2017 after sharp falls in Hong Kong and Shanghai .

Emerging currencies stayed under pressure. The yuan slipped to 2-1/2 week lows against the dollar, leading Asian peers lower and keeping the Australian dollar – heavily linked to Chinese trade – close to its lowest since February 2016.

Emerging markets have been the biggest victims of the trade spats and rising U.S interest rates. An index of emerging currencies is down almost 7 percent this year.

Emerging markets’ woes have been exacerbated in many cases by heavy borrowing over the past decade, with Societe Generale analysts noting that “the misallocation of capital following a decade of cheap money is starting to be exposed”.

While the worst hit Turkish lira and Argentine peso have steadied off record lows, the Indian rupee is continuing to plumb new troughs, taking year-to-date losses versus the dollar to more than 12 per cent.

The dollar inched 0.2 per cent lower against a basket of currencies, as hopes grew of concessions by Canada that would resolve disputes over reworking the North American Free Trade Agreement.

Long-dated U.S. bond yields stayed just off the one-month highs hit on Tuesday after data showing sustained strength in the jobs market and the Treasury started a record debt sale amounting to almost 150 billion dollars.

The rise in U.S. yields has hit Italy. It has been one of the bright spots in world markets in recent days, as fears have receded of a government spending binge. But Italian 10-year yields rose two bps off six-week lows.

The British pound also slipped off five-week high hit this week against the dollar, as nascent optimism over a Brexit trade deal with the European Union subsided.

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The Central Bank of Nigeria on Tuesday injected $210m into the foreign exchange market to meet customers’ requests in various segments of the market.

The CBN said  in a statement that it offered $100m to authorised dealers in the wholesale segment of the market, while the Small and Medium Enterprises segment got $55m.

It said customers requesting forex for invisibles such as tuition fees, medical payments and basic travel allowance were allocated the sum of $55m.

The statement said, “The CBN, following the earlier take-off of its intervention in the sale of foreign exchange in Chinese yuan, injected the sum $340,507,376.51 into the interbank retail secondary market intervention sales. This was in addition to the sale of CNY69,858,087.15 in the spot and short-tenored forward.”

The naira continued its stability in the forex market, exchanging at an average of 360/$1 in the Bureau de Change segment of the market as of July 31, 2018.

Meanwhile, the CBN said it has disbursed N170bn of the N220bn fund for Small and Medium-scale Enterprises.

The Senior Manager, Department of Development Finance, CBN, Chinedu Zephaniah, who stated this at a workshop on funding Nigeria’s SMEs organised by the Bankers’ Committee in Lagos, however, said the percentage of people that repaid loans at the appropriate time was not encouraging.

He stated, “To access all the interventions of the CBN, what the SMEs need to do is to convince their respective banks that when they take the money, they will pay back on the agreed dates.

“When people pay back as and when due, it will avail others the opportunity to access the fund.”

The Head, Business Banking, Standard Chartered Bank, Benjamin Dike, said there was a need to increase credit culture in the country in order to record significant improvement in the area of financial inclusion.

“As SMEs, if you collect money to create wealth and you refund the money as and when due, the confidence of lending institutions will be high and we will collectively achieve tangible growth,” he stated.

According to Dike, most businesses fail not because they lack financing, but because they lack competent and managerial skills.

He urged financial institutions to focus on creating business knowledge and managerial capacity among the SMEs.

The Executive Director, SME, Bank of Industry, Waheed Olagunju, who was represented by the Regional Manager,  Obaro Osah, described the SMEs as the bedrock of industrialisation in any economy.

“There is a multiplying impact when the country develops SMEs. What we are doing is to develop products to address specific problems. We have about 42 clusters across the federation that we have identified,” he stated.

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The President, Dangote Group, Aliko Dangote, has said that his company’s Corporate Social Responsibility initiatives have commenced in Mfila, Congo Brazzaville, where it just opened a $300m, 1.5 million-metric-tonne capacity cement plant.

The cement magnate declared that $1.2m had also been given as loan to aid the country in completion of a bridge.

He was addressing the concerns of the local people about their welfare, noting that it was the firm’s policy to give back to the people in areas where it was operating.

In addition to the bridge, the firm, according to him, has also established scholarship schemes for students around the area.

The Minister of Mines and Steel Development, Dr. Kayode Fayemi, who represented President Muhmmadu Buhari at the event, noted that Dangote Cement Plc with its 29.25 million metric tonnes of cement production per annum had contributed substantially to the expansion of local cement production from about three million metric tonnes per annum over a decade ago to an anticipated figure of 45 million metric tonnes per annum by the year 2018.

He reiterated that with local cement production, Nigeria had saved over $3bn annually from the importation of the product.

Buhari stated, “Also by successfully substituting import with local production, we have saved about $3bn spent on cement importation into Nigeria annually.

“As a matter of fact, one of the cardinal policies of the Nigerian government today is to fast-track industrial development in our country by enhancing productivity at every stage of the value chain.

“We believe that sustained massive local production is the best way to grow an economy in the long run and we will continue to pursue this policy vigorously because it will not only help us to create jobs for our teeming youths, but it will also help to improve on the standard of living of our people.”

According to him, with the 1.5MT per annum cement plant in Congo, Dangote’s cement plant is the largest in the country.

“It is clear that this will bring a lot of job opportunities arising from this project, which will further strengthen Dangote’s position as one of the largest employers of labour in Nigeria outside the Federal Government,” the President added.

Describing the Dangote Cement brand and Dangote himself as worthy ambassadors of Nigeria, Buhari urged other African business owners to emulate him and invest on the continent.

“I would like to encourage all other African countries to emulate the Dangote Group by investing in Africa because in the final analysis, it is only Africans and not foreigners who can salvage the continent,” he stated.

 

Ezekwesili calls for national dialogue on poverty

Image result for Ezekwesili calls for national dialogue on povertyA former Minister of Education, Mrs. Oby Ezekwesili, has called for an urgent national dialogue to discuss the problems of exclusion and poverty in the country.

Speaking at a plenary session at the Nigeria Economic Summit, which ended in Abuja on Thursday, the former World Bank Vice President for Africa said talks on political restructuring must go beyond agreements usually reached by politicians and be inclusive of all Nigerians.

Ezekwesili stated that it was important for the government and people of Nigeria to develop a fair sense of urgency, end the culture of diplomacy around failure and interrogate why the country had been failing.

She said, “We are now at the region I call unsustainability of failure. This failure cannot be sustained. The fair sense of urgency that must underpin the way we are looking at the challenges we are dealing with should factor into the speed with which we are identifying the obstacles to our growth, development and our shared prosperity.

“This country is ripe for a conversation but the conversation must be about the economics of a functional Nigeria because a Nigeria that functions economically is a Nigeria that gives everybody a stake in it.

“When people feel a sense of stake, there is no exclusion. When people feel a sense of stake, it basically mobilises everyone to the level of productivity that it can generate. For as long as we don’t do this, what we would have is occasional improvement; and we think we are fine, but look at our data.”

She added, “Our data tell us that three to four million young people enter the unemployment market every year; only 10 per cent of them will be absorbed. The economy is not expanding enough. Even in the season of high growth, it was structurally shifting enough to absorb that kind of population.

“Our data tell us that compared to a country like Singapore at more than 92 per cent of literacy (what you call the knowledge quotient), we are at a level of about 52 per cent. There is such a wide gap. Without that knowledge quotient of stock of people with knowledge, it is going to be difficult to make this country as productive as it should be.

“You look at what we have produced with all the factors that we have available to us, the growth that comes with the factors and frontiers of possibilities that we have, it gives a GDP per capita of about $2,400, compared that to perhaps Singapore, which is at almost $60,000. Then, you say to yourself; these factors that create this divide, can they not be addressed? That is where the conversation becomes absolutely necessary.”

She further stated, “The colour of the woman who is deprived an opportunity in Borno State is the same colour of poverty of the man in Bayelsa State or the young girl in Nnewi or the elderly woman in Ibadan. So, if we look at over 100 million Nigerians who could be lifted out of poverty still being in poverty, we cannot at all not have a sense of urgency.

“The fair sense of urgency will mean that we discuss even the most painful of it. We must discuss our failure. This failure is too bad. The diplomacy around failure must end. We must discuss our failure and why we must stop failing. Then we say, is it better to be building small borders or a large population that works?

“Data tell us that it is better to be a large nation that works. If it were not so, Rwanda would be an amazing economic magnate because on the economic side, they have done a lot of things right but it is still a small economy. It cannot pull it. We can but we must be a country that works.”

“So that conversation as to how to make this country work is a conversation that is not between the private sector and the government. It is a conversation amongst Nigerians – real Nigerians backed by data. Data will drive us to see some of the things that we have been blind to.

“One key thing that we have been blind about is that we actually are at a place of possible advantage in that if we got it right with making the human being – the Nigerian – to be superior to oil; if we defended the Nigerian more than we defended the oil installations and shifted our mind-set towards them, then what we will realise is that Africa can claim the 21st century by significant quantum leap in terms of human capability. We are that country that could become a provocation to the world.”

Ezekwesili, who received loud ovations, also chided economists and the Nigerian Economic Summit Group for keeping silent when the government was making wrong policy choices that led the country to recession that hurt the poor very badly.

Image result for fasholaElectricity consumers who bypass their meters will be forced to pay up to N450,000 as fine, the Nigerian Electricity Regulatory Commission has declared.

According to NERC, financial sanctions ranging from N50,000 to N450,000 for meter bypass by power consumers have been drafted by it and have been endorsed by the 11 electricity distribution companies operating in the country.

It was gathered that NERC’s decision was also endorsed by the Federal Government through the Minister of Power, Works and Housing, Babatunde Fashola.

This is coming as the regulator revealed that it was perfecting plans to deploy prepaid meters in government’s Ministries, Departments and Agencies in order to avert future debt accumulation by the MDAs.

The Vice Chairman, NERC, Sanusi Garba, while speaking on the prepaid meter issues raised in the zone of the Jos Electricity Distribution Company, told Fashola and other participants at the last monthly meeting of operators in the sector that the amount being charged as financial sanctions depended on the class of power consumer.

Garba’s disclosures were captured in the minutes of the 19th monthly power sector meeting, obtained by our correspondent from the Federal Ministry of Power, Works and Housing in Abuja on Monday, as operators in the sector gear up for the next meeting this month.

The minutes read in part, “The vice chair, NERC (Garba), stated that the commission’s order on financial sanctions on meter bypass was ready for signature. He noted that the financial sanctions on meter bypass ranged from N50,000 to N450,000, depending on the class of customer.

“He stated that the order was made in consultation with the Discos and that the commission would hold a meeting with the relevant stakeholders to discuss issues surrounding eligible customer declaration, metering, review of the MYTO methodology and regulations on business continuity.”

The minutes noted that Fashola advised NERC to be more accommodating during consultation and “advised the commission to place the highest level of sanctions on meter bypass to deter customers from such act.”

“He (Fashola) advised the Discos to prosecute offenders at the municipal level by liaising with the respective state governments,” it added.

The minutes added that all queries from the Discos on the MDA debts were answered in a memo to the Federal Executive Council, which was forwarded to the Permanent Secretary of the power arm of the FMPWH.

Fashola then suggested that payments should be made on undisputed claims, while the disputed MDA debts were reconciled.

“The suggestion was unanimously accepted,” the minutes added.

Garba informed the meeting that plans were underway by the NERC to deploy prepaid meters in government’s MDAs to avert future debt accumulation, as the meeting resolved that the Discos should bear the cost of verifying the remaining disputed MDA debts for a period of one to two months.

The Market Operator reported that Eko and Yola Discos made 100 per cent payment for services rendered in the month of July, as participants applauded both firms for the feat.

The NERC vice chairman also informed the meeting that the commission wanted to meet the minister to discuss tariff issue for some classes of customers.

SON Destroys Substandard Products Worth Over N450 Million

SON DG ABOLOMA
SON DG ABOLOMA

The Standard Organisation Of Nigeria (SON) has warned importers and dealers in substandard goods that Nigeria is no longer a dumping ground.

Osita Aboloma handed sown the warning Tuesday during the destruction of substandard product worth over N450 million at dumpsite in Epe, Lagos state.

The Director General while explaining that substandard goods are dangerous to lives, properties and the nation’s economic health, called on all stakeholders, including the media, to join hands in the campaign to rid the nation of such products wherever they exist in the country.

He declared: “We are destroying these substandard products worth over N450 million. These products have been labelled substandard after we carried out due diligence and conformity assessment to requisite standards on them.”

According to him, the products failed all conformity and integrity tests, maintaining that the decision to destroy them was to save lives and properties of Nigerians, who may fall victims to these killer-products if allowed to circulate.

Abaloma added: “The substandard products we are destroying today are bulbs, cables, tyres, tubes, shaving sticks, aluminium coils among others. We decided to perform the destruction exercise at two sites—Ogba and Epe.

“We are destroying expired tyres and tubes at our Ogba warehouse. The tyres and tubes require specialised mechanical equipment as well as special handling for their destruction, as their particles could be recycled and useful for other industrial purposes.”

He insisted that the destruction is a clear signal to all and sundry, particularly purveyors, importers and dealers in fake and substandard products of the consequencies of their actions and the fact that Nigeria is no longer safe for them.

Telecom Firms Plan Mass Sack to Cut Cost

NCC
NCC

Following April 28, MTN sacked 200 workers and 80 of its contract

workers, other telcos are bracing to down their staff strengthen in a

bid to trim down the huge over head

 

Reports have it that a massive Purge is imminent in the

telecommunication sector due to cash-crunch issues.

 

Indications emerged at the weekend that telecommunication operators in

the country are considering cutting cost and sacking some of their

workers, citing the effects of Nigeria’s first economic recession

since 1991.

 

According to those who know about this but are not authorised to

speak to the media, the telcos are lamenting harsh operating

environment and regulatory headwinds.

 

The MTN purge stirred uneasiness among other workers of the company

and those of other telecom operators. Analysts are of the belief that

the challenges confronting telcos have taken toll on them, especially

in their revenue. They also see a situation where the operators may

look for dishonest ways to keep afloat except Nigerian Communications

Commission, NCC and other relevant agencies closely monitor them.

 

When the telcos were reached for comment some of them said they will

get back to us but did not.