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Electricity tariff hike: The apogee of suffocation

The decision by the Bola Tinubu-led administration to hike the price of electricity at a time when the country’s economy is going through stagflation amounts…

The decision by the Bola Tinubu-led administration to hike the price of electricity at a time when the country’s economy is going through stagflation amounts to making a bad situation worse.

It is agreed by experts in the industry that an increase in electricity tariff is inevitable due to fluctuation in the price of gas and rise in the dollar. However, there should have been a more holistic way of addressing it, through wider stakeholders’ consultation, addressing the problem of corruption and inefficiency in the sector, as well as effective awareness of the consumers.

Hiding under the guise of trying to attract investors to that sector or saying that Nigerians are not paying a cost-reflective tariff is not the way to address the problem. The economic consequences of the over 200 per cent increment in the tariff is huge, whether it is for only those in Band A or whatever band.

There is a lot of corruption and gross inefficiency in that sector. From when the sector was privatised till date, Nigerians have been struggling with epileptic power supply. The national grid has collapsed severally in the last few years.

The government should be more concerned about fixing the mess in the sector rather than hurriedly looking for an easy means of avoiding subsidy.

Reviewing and revisiting the privatisation policy is key, and looking at how the issue of metering has become unresolvable over the years due to lack of sincerity on the part of both the government and the Distribution Companies (DisCos).

According to the Nigerian Electricity Regulatory Commission (NERC), out of the 13,112,134 registered consumers, only about 5,799,095 have been metered, which is about 44 per cent of the total consumers.

This statistics shows that 7,313,039, which amounts to about 56 per cent of registered consumers, are not metered.

To address this, there should be an aggressive metering programme that will lead to 100 per cent coverage of consumers. This will guarantee liquidity for the DisCos and give more satisfaction to the consumers, with a feeling of paying for what they consume.

The government must find a way to reduce the huge losses in that sector due to high level corruption and gross inefficiency which are being passed to the public. The need to increase efficiency in supply and maintain consistent electricity should be more paramount to the government than tariff hike.

The Nigerian economy is currently going through a lot as a result of fuel subsidy removal and floating of the exchange rate. Coming up with a hike in electricity tariff at this point in time will increase the cost of production, which will lead to higher cost of doing business that will eventually lead to job losses.

With a high inflation and unemployment rate, coupled with persistent poverty and slow GDP growth, the worst time to come up with such a policy is now. Nigerians are presently struggling to survive. Coming up with a policy that will make life unbearable for the citizens is totally unacceptable.

Government must at all times try to strike a balance between policy and reality. Addressing inefficiency and corruption in the sector, by making sure there is transparency and accountability, as well as giving consumers real value for their money, should be the topmost priority of the government now.

I hope the government rescinds its decision and does the proper thing by fixing the sector first through addressing issues that have been raised here before it completely suffocates Nigerians.


Mohammed Jibril (PhD) is with the Department of Accounting, Federal University Lafia [email protected]


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