By
Sunday Onyemaechi Eze
The federal government had on February 1, unveiled a new 45% increase in electricity tariff regime without recourse to the minute dissenting voices of Nigerians raised against it. This is coming on the heels of a subsisting court order of May 28, 2015 granted by Justice Mohammed Idris of the Federal High Court, Lagos in the case of Toluwani Yemi-Adeniyi vs NERC and others that there shall be no further increment pending the determination of the substantive suit. The moral fibre of democracy is resident in the temple of justice therefore; decisions of the court in a democratic dispensation or at any other time must be seen to be strictly adhered to. Moreover, the increase was also carried out in contravention of a Memorandum of Understanding of November 1, 2013 signed between Labour Unions and government to the effect that within 18 months gestation period, all consumers are to be metered. NLC has declared a nationwide protest on the increase. The reason for the protest according to NLC President Ayuba Wabba was that, “due process in the extant laws for such increment was not followed in consonance with section 76 of the power sector reform Act, 2005.” A resolution on the matter by the Federal House of Representatives urging NERC to shelve the proposed increase was completely ignored. Almost all the increase in electricity tariff regime in Nigeria has been generally contentious since the introduction of Multi Year Tariff Order (MYTO-1) in 2008. This current one like others before it lacks general consensus and endorsement of all the stakeholders especially the end users.
With the executive pronouncement made by Raji Fashola, the minister of power, Works and Housing at the 2016 Senate budget defence to the effect that the National Assembly and in effect all Nigerians cannot stop the increase in electricity tariff, the coast for NERC, suggestive of the rogue boy sent to steal by his parents who confidently breaks the door with his foot became clear for NERC to ensure immediate compliance and implementation of the increase by Distribution Companies. In Nigeria, whenever any price of goods and services goes up, it hardly comes down. Nigerians are faced with the same scenario with the imposition of a pro-investor electricity tariff regime designed not to end soon but for more years to come. Both the minister of power and the NERC have painstakingly tried to justify the rationale behind the increase to no avail. In short, there is no justification for the increase. It is clear that the approval of stakeholders NERC “duly” considered and “taken into consideration” before this increase cannot be that of the majority of Nigerians who find it difficult to feed on $1 per day. Has there been appreciable power supply which should have given rise to the increase in tariff?
Government and industry players have always contended that for a guaranteed stability of power supply; quick return on investment of local and foreign investors will be guaranteed with what they call “ a stable and cost-effective pricing structure to guarantee a modest return on investment for efficient industry operators” simply known as upward review of tariff. This tariff regime is an unfortunate burden which will definitely compound the visible hard times currently facing the masses of Nigerians. Nigerians voted for APC to right the wrongs of the previous administrations and put the nation on the path of true development and not to impose hardship on them. For most electricity consumers in Nigeria, the new tariff which removed the contentious fixed charge amounts to selling a dog to buy a monkey. None is better than the other. The latter is even worse. It is laughable when one of the selling points of the increase was anchored on the removal of fixed charge. The so called fixed charge for all intents and purposes was a rip-off and big time fraud. It was an illegal and corrupt power sectorial practice qualified for investigation. I urge Nigerians to demand for a refund from the period it begun till the time of its removal. Please, join me in doing this simple arithmetic. The 45% increase in percentage of the “naira per kilo- watt- hour” (n/kwh) is far above that of the removed fixed charge. For instance, by this tariff regime, Kaduna Electric: owners or rather interlopers of and providers of electricity supply and infrastructure to Kaduna, Zamfara, Sokoto and Kebbi states which previously charges N800 as fixed charge on R2 customers has raised its naira- per – kilo-watt-hour from N 17.00 to at least N 27.00. Therefore, if an R2 customer consumes say 300 units of energy per month, the cost amounts to N8100 excluding VAT, instead of N 5900 in addition to fixed charge as obtained previously, without VAT.
According to africacheck.org, a 2011 World Bank survey of 3000 Nigerian businesses revealed that, “the biggest problem was unreliable power supply. Businesses reported that they experience average power outage of 8 hours per day. 88% of retail and manufacturing businesses surveyed showed that approximately 69% of their total electricity usage was produced by private generators. The expenses incurred running private generators cost the average business the equivalent of more than 4% of their sales.” The minister of Power should step up a robust monitoring and evaluation mechanism to continually monitor and report the level of services DISCO’s provide with this and every other tariff increase while a performance benchmark for power infrastructural development in the sector should also be in place to enable government and Nigerians to see and be able to appraise deliverable results and progresses made in the entire sector especially by the DISCO’s.
Nobody is against tariff per se, but it is unheard of for a service provider to confidently demand for an increase in price of an abysmal provision of service obviously in short supply. You cannot put something on nothing and expect it to stand. A nation confronted with harsh economic realities of borrowing $3.5bn emergency loan to fill the growing gap in budget deficit occasioned by the tumbling crude price should not condemn Nigerians with an increase in tariff simply because the new owners who obviously lack the needed capacity to move the power sector forward presurises government to do so. So many fledging business empires have been built from nothing to something in Nigeria.
These new owners should identify other plausible ways of revenue generation within the power sector other than tariff increase. After three years in the saddle, what stops them from producing meters, aluminum conductors, shackle insulators, electric poles etc. on their own as a way of revenue generation. Those who cannot contain the heat should leave the kitchen. It is time for government to stop bending backward to appease some interests whose excursion to the power sector is to further feather their financial nests. The new owners should think outside the box to be able to recover the backlog of arears they inherited when buying the companies. Nigerians will no longer entertain another increase in tariff without commensurate available power supply.
