The Socio-economic Rights and Accountability Project (SERAP) clearly expressed the thoughts of the majority of Nigerians when it recently called on President Muhammadu Buhari to direct the Minister of Power, Goddy Jedy-Agba and the Chairman/Chief Executive, Nigeria Electricity Regulation. Commission (NERC), Prof. James Momoh, to immediately reverse the “illegal, unjust and unreasonable” increase in electricity tariffs, which reportedly came into effect in December 2022. The concern is understandable.
There have been a number of arbitrary hikes in electricity rates without corresponding improvement in electricity supply, which is misleading and deceiving members of the public. This injustice should have no place in a government that wants to fulfill its constitutional commitment to the welfare of the people. Arbitrary increase in power consumption rates and indeed in the rates of other businesses should take knowledge of the poverty level of Nigerians. When the government imposes higher taxes, even in the form of tariffs, without an increase in workers’ remuneration, the people are poorer.
Given the massive intervention of the government in the privatized power sector, together with the low value over the years, it is very important that SERAP urges the President to conduct an investigation into the spending of public funds created as ‘investment and rescue funds’ by successive governments. electricity distribution companies, DisCos and companies producing GenCos since 2005 and prosecution of cases of corruption and mismanagement.
After the approval by NERC, the electricity tariff has been increased in DisCos in the country by December 2022. Some prepaid customers have confirmed the increase. NERC has stated that: “After consultations and directions on tariff policy, the Commission (NERC) hereby approves the suspension of tariffs applicable to customers in service bands D and E (i.e. customers with a service commitment of less than an average of 12 hours of daily supply during one month) for the period 1 September 2020 to 1 January 2021.
In the letter dated January 7, 2023 and signed by the Deputy Director of SERAP, Kolawole Oluwadare, the organization said: “The increase in electricity rates will increase extreme poverty across the country and undermine the ability of millions of Nigerians to meet their basic human needs. The increase in electricity rates fails to follow due process .This is completely inconsistent and incompatible with the provisions of the Nigerian Constitution 1999 (as amended), the Electricity Sector Reform Act and the country’s international human rights obligations.
We could not agree more with SERAP, as millions of Nigerians continue to live in darkness, despite the government’s massive spending of trillions of naira as investments and guarantees for power companies. “The increase is unjust, especially, because of the unreliable, inefficient and poor supply of electricity in the country. Instead of providing electricity discounts to poor Nigerians, the successive governments continue to give guarantees to the electricity companies.
Indeed, the Federal Government should, in line with the advice of SERAP, use the report by the National Bureau of Statistics (NBS), which shows the revelation that about 133 million Nigerians are poor, as a basis for increasing access to regular electricity supply and extending electricity to rural households that away.
“The latest increase in electricity rates comes on the heels of an NBC report, which shows that more than half of Nigeria’s population is multi-dimensionally poor and cooks with dung, wood or charcoal, instead of cleaner energy. High shortages are also seen nationally in sanitation , health, food security and housing,” said SERAP, stating that access to affordable electricity services is a prerequisite for improving the conditions of people living in poverty. This is a means to generate other essential services that reduce poverty, bearing in mind that access to electricity facilitates the eradication of poverty.
There is no gainsaying that the rate hike will increase the financial burden on socially and economically vulnerable Nigerians and further marginally and disproportionately affect them and increase their vulnerability to discrimination.
The reaction of groups and individuals condemning the rate increase was generally uniform. For example, the Manufacturers Association of Nigeria (MAN), which has always questioned the arbitrary increase in tariffs, said that the increase would come at a time when manufacturers are groaning because of the deep injuries they have inflicted on the sector with the harsh operating environment, the increased burden. taxes and self-generated electricity.
Reacting to the previous increase, the Acting Director General of MAN, Mr. Ambrose Oruche, said that most MAN member companies are classified in the ‘D’ categorization (D1, D2 and D3), which means ‘Industrial Consumers’ where the rates are the highest. The Leadership of the Organized Private Sector in Nigeria (OPSN) also in its reaction noted that various projections for generation capacity for different years were made but not achieved, but rates continue to rise.
While the need for cost reflective rates is not disputed, as the Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, observed, there is also the need to consider the effect of the increase on the welfare of Nigerians, considering the abysmal power provided and the huge negative effects on the industry and commerce. The government should be more concerned for the welfare of the citizens than increasing their income regardless of the surrounding conditions. It is apparently with this in mind that the Nigeria Labor Congress (NLC) rejected the rate hike approved by NERC. In a statement, its president, Comrade Ayuba Wabba said the labor force was upset with the increase and condemned all plans to inflict more pain on Nigerians at a time of extreme economic hardship.
Another area of concern about the increase is that the majority of Nigerians are not yet metered, meaning most consumers are still saddled with exorbitant bills. The government, through the regulatory NERC, should insist on prepaid metering for Nigerians who have long suffered from fixed charges and estimates of unconsumed electricity bills. The government is only being half-witted by removing irritating fixed charges and then reintroducing them through new tariffs, which make no difference.
So, NERC can do more to improve the efficiency and productivity of DisCos and even GenCos instead of sticking to tariff hikes. The power sector has been privatized and new owners are not required to invest in the sector. Why burden consumers who do not have this time? Nigerians have long suffered from epileptic electricity supply. Industrial production and various other economic activities that require energy have been preserved.
It is time Nigerians through private individuals, corporate bodies, and companies take up the challenge and generate marketable power. It is gratifying that many institutions now do this.
States must also be responsible by generating power for their people regardless of the complications in the exclusive legislative list that gives NERC a monopoly on electricity supply. There are solutions to the electricity problem, especially the exploration and exploitation of solar power and other potential resources. Asking people to pay more for electricity that is not available is a scandal that must be rejected by the people’s representatives in all legislatures with appropriate legislation and enforcement supervision.