Against the grain of public outcry against any form of raise in electricity tariff at this time, the Nigerian Electricity Regulatory Commission (NERC) has effected the hike. And it did it in a most indecorous manner. The commission created a sort of an ‘Orwellian’ scenario by segregating electricity consuming public into five bands, A to E.
According to the service-based tariff scheme which NERC rolled out penultimate Wednesday, the hike is only for Band A consumers, who will now pay N225 per kilowatt/hour as opposed to the N66 per kilowatt/hour they were paying hitherto, a 231 per cent hike. In return, they will now be enjoying a minimum of 20 hours of power supply daily, while those in Band B will also be getting a minimum 16 hours daily. For Band C consumers, it is 12 hours per day; eight hours daily for Band D and only four hours per day for Band E consumers.
According to the Minister of Power, Adebayo Adelabu, Band A consumers represent 15 percent of 12.2 million electricity consumers or 1.8 million consumers. The rest approximately 10.4 million, he said, will continue to enjoy subsidy in electricity supply till further notice.
“This review,” Adelabu added at a press briefing in Abuja penultimate Friday, “is in conformity with our policy thrust of maintaining a subsidized pricing regime in the short run with a transition plan to achieving a full cost-reflective tariff for the sector over a period of three years.”
The hike is expectedly stirring a lot of hoopla and public outrage, most especially because it took immediate effect. According to the power minister, although the tariff hike for the rest bands B to E will be implemented in phases within the next three years, a frontline human rights lawyer, Femi Falana(SAN), pooh-poohed the minister’s claim, saying that the government might effect the hike for the rest bands sooner than promised.
The SAN, who was featuring in Channel TV’s ‘Sunday Politics,’ said he might contest the matter in court if the authorities fail to respond to the complaints he would raise on the matter. “We will have to go to court,” he hinted, “because the government has warned, the minister has warned, that the increase(for Band A consumers) this time will only bring the government or the DisCos N1.6 trillion when the destination is N3trillion.”
Falana added: “So, the impoverished people that he(minister) is talking about, the other bands, the government is going to extend the rises to them very soon, so that the N1.4 trillion that the minister is talking about may be recovered.”
He chided the government for being insensitive to the plight of Nigerians who are still dealing with the economic consequences of the removal of petrol subsidy and the collapse of the foreign exchange windows, two policies of President Bola Tinubu’s administration that have resulted in an unprecedented high cost of living.”
We had said in our earlier editorial on this subject matter, and we are reiterating our position, that any hike at this time verges on the odious; that it is oddly to talk of any tariff hike now. The minister of power had laboured hard to justify the planned increase on the government’s bugbear over the humongous debts it had incurred in its efforts to sustain the subsidy on electricity consumption.
He had said, inter alia: “Today, we owe a total of N1.1 trillion to the power generating companies… . Today, we have a legacy of debts to the gas companies of $1.3 billion at today’s rate. That is close to N2 trillion.”
Adelabu added last week on Channels TV that it would require almost N3 trillion to sustain the subsidy on electricity this year alone. This, he said, the government cannot afford in view of other national demands competing for attention.
We had posited in our earlier editorial thus: “However, whatever the allure of arguments that may have impelled the government’s impulsion, it still smarts of insensitivity to bring forward a raise in the electricity tariff at this time. It is immoral, vexatious and indecorous to contemplate passing the burden of withdrawing subsidy in another public utility on the already impoverished populace eight months after the sudden withdrawal of fuel subsidy.
“It amounts to an overkill to attempt so soon to heap another stack of burden on the average Nigerians, who are already sagging under the grueling weight of economic hardships foisted on them by the astronomical rise in the costs of living, arising from the fuel subsidy removal ….
“Apart from erratic power supply that obviates any hike in tariff for now, it is glaringly ill-timed to talk about any subsidy removal now unless the authorities want to further incense the people. Any attempt to implement the cost-reflective tariff now could ignite obstreperous outbursts and inflame incendiary passions, the outcome of which will be unpredictable.”
Besides, from the reaction of the former Managing Director of the Nigerian Maritime Administration and Safety Agency(NIMASA), Dr. Dakuku Peterside, it can be surmised that the problem with electricity in Nigeria appears to be insuperable and impalpable. Dr Peterside posited that the challenge with power in the country is beyond just spending money. It verges on inefficiencies in the system, he surmises.
The ex-NIMASA boss, who is also a one-time Rivers State governorship candidate on the platform of the ruling All Progressives Congress(APC), said although he is an advocate of an appropriate electricity pricing, he does not support the current policy approach “because it is counterintuitive and counterproductive.”
His reason: “First, between 1999 and 2015, Nigerian Senate documents show that Nigeria spent N2.74 trillion on electricity, yet there was no significant improvement in the generation of power delivered to homes and businesses. From 2018 to 2020, we spent N1.7 trillion on electricity, yet 43 percent of our population, according to the World Bank, needs to be connected to the national grid.
“The inference we draw is that the electricity/power challenge is beyond money. There are obviously systemic inefficiencies and corruption that no one has bothered to address. Asking people to pay more will transfer the inefficiencies to the populace.” We cannot agree more.
Again, stratifying the consumers into bands for the purpose of providing differentials in the rate of power supply is ludicrous and inhumane. It could be an unwitting error of omission or commission on NERC’s part, but it is glaringly unfair to confer the privilege on some special consumers of enjoying a minimum of 20 hours of power daily, while some others in the same country are so hapless that all they could get is fours’ supply in a day!
Creating an ‘Orwellian’ scenario in which some proverbial animals are made to be more equal than others is tantamount to discrimination against some consumers of the same product or service. It is also antithetical to constitutional provisions.
Chapter Two, Section 17(1) of the 1999 Constitution states that “The state social order is founded on the ideals of Freedom, Equality and Justice,” while sub-section 2(a) provides that “every citizen shall have equality of rights, obligations and opportunities before the law.”
In the same vein, Chapter 4, Section 42 of the same Constitution guarantees “Rights to Freedom from Discrimination” in whatever form. Sub-section 2 says “No citizen of Nigeria shall be subjected to disability and deprivation….”
It is thus unwholesome to deprive sections of the consuming population of adequate power supply by reason of their economic status and/or where they reside. The government is duty bound to provide equal rate of service to every citizen.
In other words, the vulnerable population deserve to be exempted from the cost-reflective tariff and should continue to enjoy fairly stable power supply, even if it has to come through subsidy. The primary responsibility of government is to make life comfortable for all citizens, irrespective of birth, age, race or socio-economic status.
It is quite unfortunate that our successive leaders have continued to pander to the wicked machinations of International Monetary Fund(IMF) and the World Bank executives, who have always advised them to do away with subsidies on major social amenities; whereas their home-countries subsidize virtually every social amenity, including electricity supply, for the purpose of heating up homes given their unkind, chilly weather conditions, to maintain social rest and equilibrium.
Besides, the government, through the insensitive segregation, may be solving one problem to quite unwittingly create another. First, the policy may worsen rural-urban drift because people will gravitate from where power supply is low, which may include the rural settings, to relatively more exposed areas like urban and semi-urban centres where power is likely to be more stable. This will exacerbate the problem of urban slums and cause more stress and strains to city infrastructure.
Second, the lopsided power supply equation may also deal a lethal blow on the nation’s vast informal sector, which is the backbone of the economy, contributing a large chunk of our Gross Domestic Products(GDP). These businesses — micro, small and medium-sized businesses, the vibrant creative industry, innovation hubs being run by our ingenious youthful population in formal urban centres, face imminent peril of extinction with the draconian tariff regime.
Electricity, without any doubt, is the hydraulic fluid that lubricates the engine of business growth and infrastructural development. The operators of the informal sector are already stretched almost beyond limit, paying through their noses, to maintain fuel-powered generating sets and other alternative sources of power given erratic electricity supply. It is doubtful if many of them will be able to afford the prohibitive tariff regime being rolled out by NERC. Many businesses in this bracket may eventually close shop.
Similarly, even if bands B to E consumers are spared the immediate headache of shouldering the new tariff hike, it is still nothing to cheer about because they will still indirectly bear the brunt of the Band A consumers’ yoke. Band A consumers certainly include top notch manufacturing companies, telecommunication firms, banks, hospitals, schools, commercial hubs, elite residential areas, among others.
The 231 percent hike in electricity tariff for them is a direct increase in the cost of their businesses. At the end of the day, they will simply pass the additional cost to the end users or consumers of their products and services, commensurate to the percentage of the hike.
So, from whichever perspective, the new tariff regime is hasty, indecorous and ill-timed. The authorities concerned should return to the drawing board and meticulously fashion out what Dr Peterside recommends as a “gradual, sequential step to the ultimate destination of appropriate electricity pricing.”
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