1 June 2012

Nigeria: New Electricity Tariff Splits Business Community

As the federal government-proposed electricity tariff hike takes effect today, Nigerians have continued to express displeasure over government's insensitivity to their plight, despite assurances that the move is aimed at ensuring stable power supply and guaranteeing efficient customer service delivery.

Government has argued that the tariff is structured to attain cost-reflective pricing that will ensure private sector investment in the generation, distribution and transmission of electric power in the country.

The government has also argued that the urban poor and rural dwellers called R1, which consume 50 kilowatt hour or less monthly, will pay less than they currently do: N4 per kilowatt hour as against the present N7 per kilowatt hour.

The R2 and C1, which comprises most urban residential customers and small-scale enterprises, constituting about 80 per cent of power consumers in the country, will pay between N11 and N12 per kilowatt hour, in addition to a flat fixed charge of N500 monthly.

According to government, only the R3 and R4 category made up of the very rich and industries will experience a significant increase in tariff.

But reacting to the move, respondents at separate interviews faulted government's decision to improved tariff now in the face of abysmal power supply.

"They keep saying the urban poor and rural dwellers will benefit; is it not when they see the light that they will benefit? I'm still not enjoying light and I stay in Mpape, an Abuja suburb, where you have many urban poor. Most people virtually depend on generators for power, so what excuse does government have to increase tariff? For me, increasing tariff is not the solution; this is just like what they did when they increased fuel price without any justification. I think they should increase power supply before increasing tariff," said Mrs. Bukola Kadri.

Another respondent, John Ezekiel, said: "I do not support the government in this matter because if you study the electricity industry there is so much abnormality. People have paid for meters and, up to today, they don't have meters. PHCN staff are criminals. When I went to the office to claim my meter, they told me that they couldn't find my teller and asked me to go and look for the person I paid to, whereas the person has been transferred to.

"The sector is enmeshed in a lot of fraud; the forces there would not even allow the initiative to work even if government had a genuine intention. However, Nigerians would be willing to pay for quality service. If there is regular supply of power, and accurate billing, we will pay. But if the metering and billing system is wrong, how will they increase tariff now? They should improve on the sector's performance first before increasing tariff."

Meanwhile, organised labour has vowed to resist the proposed increase, threatening that, "we might resort to bringing Nigerians to the street as was the case with the January anti-subsidy protest".

LEADERSHIP gathered that the National Executive councils of both the NLC and TUC would be meeting in June to further give directives on the next line of action, should government insist on the new tariff regime.

Speaking exclusively to LEADERSHIP in Abuja, acting general secretary and head of information and public relations of the Nigeria Labour Congress (NLC) Comrade Chris Uyot said any increment in tariff without a corresponding increase in power supply will be a call to anarchy.

On what the organised labour would do should government insist on the new tariff, Comrade Uyot said "when we get to the bridge we will know how to cross it".

According to him, Nigerian masses should not be forced to pay for the profligacy of the few elites in the name of attracting foreign investors, adding that President Jonathan should not allow himself to be deceived that Nigerians have been sensitised on the planned increase.

A senior labour leader at the TUC secretariat, who does not want his name in print, said government should not take working people for granted by inflicting more hardship on them.

He said TUC categorically rejected the proposal on the grounds that it would attract investors into the sector, stressing that such claims were raised during the subsidy removals.

Similarly, the organised private sector (OPS) has opposed the proposed increase, saying it was capable of worsening the troubled industrial sector and culminate in mass sack of workers. It is a deliberate attempt to stiffle businesses in the country, he said.

Speaking with LEADERSHIP in Lagos, the immediate past president of the Lagos Chamber of Commerce and Industry (LCCI), Otunba Femi Deru, said "the country has not recorded any significant improvement in power supply in the last three years despite the upward reviews in electricity tariff; if anything, power supply has deteriorated over time."

He called for the creation of the right institutional framework for the delivery of electricity to the people. "Such institutions should be totally insulated from the public service bureaucracy and meddling by the political leadership," he said.

On his part, the National Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA, Chief Henry Ajayi, said efforts to fix the power sector had not shown any remarkable result.

"We acknowledge the ongoing relentless effort to overcome the power issue, but we must express our worries with what appears to be slow pace in the implementation of the 'Roadmap for Electricity' in the country. The present state of power supply in the country has continued to constrain capacity utilisation in the industries and also increase cost of doing business," Ajayi said.

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