Lifting the electricity tariff burden

Electricity distribution companies (DISCOS) across the country in
conjunction with the Nigerian Electricity Regulatory Commission
(NERC) were already executing the new tariff they had imposed on
Nigerians earlier this year before the intervention of the Senate, last
week stopping them from further implementation until the outcome of
a public hearing that would be carried out by its relevant committees.
The Senate had based its decision on the biting economic hardship
arguing that it was unrealistic to increase electricity tariff, with the
Deputy Senate President, Ike Ekweremadu, saying that Nigerians were
already on “life support”.
The Senate also mandated its Committees on Labour and Power to
meet with the relevant agencies of government and find a lasting
solution, and in the meantime, to conduct public hearings on the
matter in oder to come to an informed final decision.
We appreciate the wisdom in the intervention and subsequent action
taken by the Senate and urge all parties to key into this window of
mutual understanding in resolving the issues.
Without prejudice to the outcome of the public hearing and the
meeting between the legislative committees and the government
agencies, we urge the parties to take into consideration the salient
facts surrounding this logjam.
First, the DISCOS have continually lamented the poor state of the
electricity infrastructure they inherited coupled with the harsh
operating environment which, they said, have made development and
effective service delivery nearly impossible. They have also argued
that Nigeria’s electricity tariff is one of the lowest in Africa.
Consequently, they believe that for the services to improve,
commensurate tariff needs to be paid to enable them and the
government increase investments in electricity infrastructure re-
development.
But it appears an unfair logic to collect money from the consumers
before offering required services. We believe that the DISCOS should
invest in their businesses, provide reliable power supply and charge a
justifiable tariff to recoup their investment.
We suspect that the DISCOS apparently discovered a huge gap in
their due diligence for the acquisition of interests in the electricity
business only to resort to remedial actions after committing their
funds.
Unfortunately this is not the time to impose additional burdens on the
weary purchasing power of the average Nigerian neither is it a
convenient time for government’s financial intervention given our
dwindling revenue.
Part of the middle ground to be reached could include rigorous
interrogation of how they arrived at the new tariff, the actual cost of
delivering electricity to the consumers and an equitable profit margin.
Government can still intervene through the Central Bank of Nigeria
(CBN) in a form of concessionary loan or even government’s non-
controlling temporary equity investments in the DISCOS to free
consumers from the harsh cost of infrastructural investments.

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