The burden of an ill-conceived electricity tariff increase

Nigeria is a nation with a long history of perennial challenges of public power supply. The country seems to have unfortunately accepted the anomaly as part of its life. Since one came of age, the power sector bears the trademark of inefficiency. The problem of insufficient power supply has remained unchanged. The old reasons for […]

Nigeria is a nation with a long history of perennial challenges of public power supply. The country seems to have unfortunately accepted the anomaly as part of its life. Since one came of age, the power sector bears the trademark of inefficiency.

The problem of insufficient power supply has remained unchanged. The old reasons for poor performance in the sector more than two decades ago are not different either. Despite the poor supply situation, citizens still pay through their noses for an underperforming power sector which delivers little or no quality services. Many Nigerians cannot remember a time when they enjoyed constant public power supply up to 15 hours per day. A lot of money has been spent and much more still allocated to the power sector but no remarkable progress has been made. What ordinary Nigerians constantly experience is poor service outcome, routine tariff increase and general inefficiency.

The latest assault on Nigerians is the announcement of a new tariff regime and classification of customers, currently placed on new categories of bands A to E. The citizens had no input when decisions were taken on this band classification. Effective from April 3, the charges of selected customers on Band A increased to over 300 per cent. Days after, the federal government hinted on extending similar measures to other band categories.

The unit cost of electricity for those placed on Band A was jacked up from 68 per kWh to 225 per kWh, excluding VAT. Those on other bands are denied electricity supply in a failed attempt to meet up with the obligations of Band A customers.

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The prevailing lie in government circles is that the increment only affects a small percentage of Nigerians and that the government still subsidises electricity. Officials implementing government policies are often economical with the truth regarding the impact of anti-people policies. In this case, the only thing that matters to them is saving without considering the economic impact of such savings on the wellbeing of the people.

Government failed to understand that industrial customers, whether big, medium or small, placed on Band A will factor in the cost of fuel, diesel and the increase into the prices of the goods and services they provide. Therefore, whether customers are placed on Band A or other categories with or without electricity, the burden of every company’s expenses is transferred to the ordinary people – customers/consumers.

When will the government concede to the mood of the nation and inputs of the masses before taking any decision on issues directly affecting them? Pundits say the band idea is a ploy to assist the cash trapped DisCos to raise funds.

Nations occupying the front row in industrial growth and development attain such feat with serious investment in power supply. There is no gainsaying the fact that access to uninterrupted public power supply has become a tall dream in Nigeria. The more money is spent on the sector, the worse it becomes.

The long wait for remedy continues while government officials have often admonished citizens to keep hope alive.

Both past and present governments do not seem to have a grasp of the fundamental problems bedevilling the power sector. If they do, Nigeria cannot be shamelessly talking about 4,500MW since 1960.

One major problem facing the sector is the appointment of people without requisite knowledge and experience. The endemic corruption in the sector and lack of purposeful goals have also contributed to the obvious failure. Almost all Ministers of Power since 1999, except Engr Bello Suleiman, were/are square pegs in round holes. They were/are green horns occupying compensatory political positions earned on recommendation or political party affiliation. As novices, they came on board bereft of ideas or blueprints to drive the government’s agenda. It is a disservice appointing an accountant or a lawyer power minister.

Policies often put in place by these appointees to address the challenges are mostly badly thought out; externally influenced or geared towards inflicting more pain.

Since 2000, tariff increases have been the only visible items dominating and governing the Multi-Year Tariff Order (MYTO) while other germane issues like customer privileges are relegated to the background.

There is no home-grown solution to the intractable problems of power except borrowed directives handed down by the World Bank or the International Monetary Fund (IMF). These borrowed ideas deepen and worsen the economic woes of the poor citizens. A country where little children always jump in excitement and shout “NEPA” when public power supply is restored after days of blackout has no business increasing the cost of electricity or services not adequately rendered. Those in charge should go back to the drawing board and comprehensively work hard to improve on the sector instead.

The power sector has been painfully balkanised, claimed and annexed in favour of some highly placed individuals just like the Europeans did to Africa in the 1885 Berlin Conference. The power company was shared as a business, serving the interest of a few. Provision of excellent services for Nigerians is secondary on the power sector reforms agenda. How could a country allocate such an all-important national asset to incompetent, non-experts in government or their associates whose interest only hinges on making quick money? The process deliberately accorded certain privileges to bidders/owners who cannot differentiate between a fuse and feeder pillar. 

The country should as a matter of urgency innovate and diversify in areas of power generation. This could be regionalised based on the corresponding resources within every geographical zone. The North East is blessed with potential in solar energy. The North West is endowed with the blessings of hydro-electricity and wind. The North Central can boast of a good level of coal deposits and resources for hydro-power supply. The South East is blessed with little water, gas and abundant coal deposits. The South South and the South West have resources in hydro-power and gas. The world is going green and Nigeria has to run with the idea together with the world.

This electricity tariff increase is ill-conceived and equally ill-timed. It should be halted. Let Nigerians breathe.

 

Eze can be reached via [email protected]