In 2023, I wrote that if Nigeria removes fuel subsidies, companies which typically use the national uniform pricing model may have to go region-based pricing. In other words, if the petroleum equalization fund which used to make the prices of petrol uniform across Nigeria goes, making it possible that the price of petrol in Sokoto would be different from the price in Lagos, no one should expect companies to offer services like telecom at the same national price point in Lagos and Sokoto.
Today, we are reading that the playbook is loading: “Telecommunications operators in Nigeria are pushing for a shift from the existing uniform national tariff structure to a regional tariff regime, which would allow them to adjust pricing based on operational challenges in different states.”
Later in 2024, I wrote: ‘Good People, Nigeria is attaining Energy Federalism (not fiscal federalism) and the implications are massive. In an upcoming speech titled “Energy Federalism and Reshaping of Nigeria’s Regional Comparative Advantages”, I will explain how muting the Petroleum Equalisation Funds (PEF) and Petroleum Products Pricing Regulatory Agency (PPPRA) will reshape regions in Nigeria’.
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But there is nothing to panic because there is a solution: give the telcos what they want, but make it clear that those in high density cities like Lagos and PHC must pay more, and demand they will use that to compensate in other parts of the country. For example, a 2GB data bill could cost N2,200 in Lagos (extra N100) and that extra enables a telco to sell to someone in Sokoto at N2,000 when optimally both would have been billed each N2,100.
Nigeria’s economy is being redesigned regionally. The challenge is that opportunities are not well distributed regionally, and that is why the reforms would affect some regions in bad ways. Lagos has three seaports with another on the way when no other city has an active one or even a deep seaport.
That is an asymmetric positioning which pushes the importer from Aba to spend an additional N6 million to truck a container from Lagos to Aba. But if we say we have a deep seaport in Akwa Ibom, even someone from Maiduguri will save at least 30% on the trucking fee compared with Lagos’. So, what the telcos are asking may not be fair considering that those which do not even have means to pay may be expected to pay more. Yet, you do not blame private companies for a lack of a national economic development plan that supports all regions uniformly.
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