The new electricity tarrif
ON August 26, the chairman of the Nigerian Electricity Regulatory Commission (NERC), James Momoh, said that President Muhammadu Buhari had ordered mass metering of all electricity consumers in the country while waiving duty on imported meters to enhance the implementation of his directive. According to him, the president’s directive was in response to the yearnings of Nigerians. Momoh said: “The president approved a waiver of the import levy on meters, so that those that do not have meters can be supplied as early as possible at reasonable costs.” He urged the public and all stakeholders in the power sector to disregard any reports of an arbitrary tariff increase, adding that measures were in place to protect the poor and vulnerable in case of tariff reviews. The NERC boss explained that tariff reviews would only follow service-based principles. “Under these service-based principles, Distribution Companies (DisCos) will only be able to review tariff rates for customers when they consult with customers and commit to increasing the number of hours of supply per day and quality of service.”
Previously, NERC had approved what it called “service reflected tariffs” for the electricity sector, which it said would commence July 1 after it was initially postponed from April 1, 2020. However, this was suspended after reports indicated that the DisCos had pushed for a postponement until key areas of disagreement were sorted. Indeed, following the deliberations it held with stakeholders, the National Assembly promised Nigerians that there would be no tariff increase until the first quarter of 2021. NERC’s August statement therefore caused Nigerians, already reeling under a plethora of increases in the cost of daily living that had made life palpably unbearable, to heave a sigh of relief. Nigerians hoped that the presidential order would bring an end to arbitrary billing of electricity consumers by the DisCos. As they had lamented for long, arbitrary bills for power not consumed are always presented to hapless customers and the song when complaints are made is always this sad refrain: “Go and pay something first.”
As it turned out, however, NERC’s promise was a hollow one. President Muhammadu Buhari approved an electricity tariff increase effective from September 1, unleashing agony on the already beleaguered populace. As pointed out by the Organised Private Sector of Nigeria (OPSN), the tariff increase came at a time when the economy is facing a potentially deep recession and Nigerians are facing increasing hardships, with unemployment rising to over 27 per cent as many factories face total closure. Without eliminating estimated billing, the DisCos, aided by the government, have now been given the power to fleece electricity consumers in the country. Indeed, the most critical question on the lips of Nigerians is: what has changed to warrant the new tariff regime and its immediate implementation?
To say the very least, the power supply situation has not improved. Nigerians have become used to countless hours of darkness. Most live under the illumination supplied by their petrol or diesel-fuelled generators. Worse still, the fact that the electricity price increase came hand in hand with an increase in the price of petroleum products makes the situation precarious. The increase is criminal. It is an act of treachery against the masses of Nigerians who have no access to the luxury in Government Houses. Nigerians are gradually being stripped bare, deprived of economic power and having no say in how they are governed. This is tragic because even during the military when the Structural Adjustment Programme (SAP) was to be adopted, the Ibrahim Babangida administration engaged in nationwide consultations and the idea was eventually jettisoned.
Reports indicate that the increase in electricity tariff is part of the requirements to enable Nigeria access IMF and World Bank loans. According to the Minister of Finance, Mrs Zainab Ahmed, “the sum of $3.4bn would be sourced from the IMF, $2.5bn from the World Bank, while the balance of $1bn is expected to be raised from the AfDB.” After months of Covid-19 lockdown, economic activities are just picking up. It is therefore a grave insensitivity on the part of the Federal Government to effect policies which will further make life unbearable for the people.
To be sure, there is a need to think outside the box. The legislature must tinker with the laws on the generation and distribution of power in such a manner that small communities will be able to generate and distribute electricity for their own consumption. The Federal Government does not need to wait until there is an uprising before it rethinks its regime of punitive policies. The new electricity tariffs are inhuman and should be suspended forthwith.
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