No To Another Electricity Tariff Hike

Electricity distribution companies also called Discos began this year with a further increase in electricity tariffs. This followed a new order issued by the Nigerian Electricity Regulatory Commission (NERC) instructing the DisCos to increase tariffs effective January 1, 2021. The hike came barely two months after the implementation of a controversial tariff increase.
The sudden increase in tariffs arose from a suspension of an earlier order issued in August increasing tariffs with effect from September 1, 2020. However, a threat by labour to embark on a nationwide strike compelled the government to suspend the tariffs for two weeks ending October 15, 2020. The Federal Government and the organised labour then agreed to provide a tariff relief of N10.20 per kilowatt-hour for Nigerians for the next three months and also distribute 6 million free meters.
The January tariff increase suggested all customers would see their tariffs increased regardless of the band unlike in the previous order where tariff class D & E was frozen. Customers on Tariff Class A, B, and C would see their tariff go back to the tariff order released on September 1, 2020. Some of these customers would see their tariff increased by as high as 120% compared to the pre-September Multi Year Tariff Order (MYTO) 2020 levels.
Recall that the proposed hike in September, 2020 was greeted by outrage among Nigerians, including labour unions. The Nigerian government thereafter suspended the hike, amidst dialogues with stakeholders. In November, the tariff was eventually implemented while discounts were given for sundry categories of customers.
However, in a sudden twist, the Minister of Power, Mr Saleh Mamman, directed the NERC to inform all Electricity Distribution Companies (DISCOs) to suspend the latest increase and revert to tariffs that were applicable in December, 2020. According to the Minister, the reversal to the old tariff was to promote a constructive conclusion of the dialogue with the labour centres through the Joint Ad-Hoc Committee.
In a contradictory statement, Mamman said there was no approval for a 50 per cent increase in the tariff, but affirmed that the NERC only made some adjustments, which led to some level of increase in the tariff. The minister also stated that the government had continued to fully subsidise 55 per cent of the on-grid consumers in bands D and E (those with lower than 12 hour power supply) and maintained the lifeline tariff for the poor and underprivileged.
Following last year’s controversial increase in electricity tariffs, the Federal Government and the Labour Centres have been engaging in positive discussions about the electricity sector through a Joint Ad-hoc Committee. That committee is led by Minister of State for Labour and Productivity, Mr Festus Keyamo, and co-chaired by the Minister of State for Power, Mr Goddy Jedy-Agba.
The reversal of the latest tariff hike is laudable. However, we think that this reversal till the conclusion of the Joint Ad-Hoc Committee’s work at the end of January, 2021, is only a temporary relief. Apparently, the three weeks respite is to accommodate the spirit of the agreement between labour and the Federal Government on tariff increase since last year. There is a possibility that the increase may be reconsidered during this period.
NERC is already anticipating an increase. This is why we call for circumspection on this issue. No matter what becomes the outcome of the Ad-Hoc Committee’s work, an increase at this critical time is ill-timed and not economy-friendly. Therefore, the government has to go beyond the reasons given for the timed suspension to include consultations with other economic actors, including manufacturers, who are the major consumers of electricity and whose businesses would be most impacted by the increase.
Nigerians are already groaning under an increment operating environment, including the debilitating impact of COVID-19 disruptions and deteriorating infrastructure. It is important for us to avoid this additional burden, moreso when the power sector is characterised by poor services. Socially sensitive policies such as this require robust engagement and dialogue. The strategic approach is important to avoid a backlash and the risk of derailment of the power sector reform.
We firmly reject any increase in electricity tariffs regardless of the final decision of the committee. Such increase will not only jolt citizens, it will be considered ill-timed, insensitive, and a deliberate move to further impoverish and heighten the difficulties Nigerians are faced with at a time they are trying to recover from the trauma of months of COVID-19 lockdown.
The deaf and dumb posture of the electricity regulator is equally worrisome. It is important to state that the NERC would be putting its name on the wrong side of history if it continues to play the ostrich while a group of portfolio investors make a blood meal of Nigerians. It is callous to hike electricity tariffs on a week the same government deregulated the oil and gas market by allowing marketers to increase fuel prices anyhow.
That Nigerians need power is stating the obvious. The MYTO was introduced to take care of different people but the framework seems to have failed. Consequently, Nigerians should take the challenge at a personal level. Individuals, corporate bodies, and establishments should produce power and vend. Many institutions are currently doing this, which is gratifying.
States should similarly take charge by generating power for their people irrespective of the complications in the exclusive federal laws that give NERC some arbitrariness. There lies the solution to the power problem. Nigerians should stop being enslaved. Asking people to pay more without electricity is a scandal that the people’s representatives in all legislatures should reject, or cease from being addressed as representatives of the people.