14 June 2018

Nigeria: Power Sector - Consumers' Trust Necessary to Reduce Debt Burden

The total unpaid liability of N1.1 trillion in the power sector, which was said to be rising by N30 billion monthly, will reduce and ameliorate if there is trust between power suppliers and the end users, the President, Consumer Advocacy Foundation of Nigeria, Sola Salako, has said.

Salako also called on discos to intensify consumer education to bridge the communication gap between them and the customers.

In an interview with THISDAY, Salako, who expressed shock over the recent declaration that the country's power sector risked collapsing under a heavy debt burden, blamed stakeholders in the power sector for not embarking on enough enlightenment campaign to galvanise their customers.

"They need the consumers to partner with them to make the entire system work. Consumers need adequate education because there is gap in level of awareness. I am shocked at the declaration that some credible customers are paying for some other customers that are by-passing meters.

"The problem is that when consumers don't know the reason why they should be paying for power which they didn't consume, they won't cooperate with the discos. They (the consumers) may be unconcerned if the Discos are telling them how much they are losing because they are not interested because they feel they are being over charged.

"But if they explain to them that this is what happened. We give you crazy bill because people are by-passing meters and are not-paying; they will help the discos fish them out. Most importantly, we have to bridge that deficit of trust as soon as we can. After this, we can work as partners because we don't want the sector to collapse," she said.

Earlier, in his opening remark at at roundtable organised by Sahara Energy Energy, the Group Managing Director of Sahara Power Group Limited, Kola Adesina, had called for alignment between policymakers and operators, adding that a cost reflective tariff is inevitable.

He said: "The discourse around electricity is usually emotional and emotive. There is a misalignment of visions and policies in the sector. I wonder why the cost of a commodity should be higher than the price of the commodity.

"There is no economic magic to guarantee efficiency in such a state of affairs. There is need to be paid to the sector a cost reflective tariffs. There is the need for systemic evaluation of every policy churned out."

Speaking further, Adesina also disclosed that it is impossible to meter all customers in Nigeria.

Like Salako, he also emphasised the need for trust among stakeholders.

"When I hear argument about metering, I wonder. I wondered because we argued about what should come last to come first. Estimated billing is a universal phenomenon; it is not a Nigerian thing.

"Everyone should not assume that it is only in Nigeria that you don't have meters. It is definitely and certainly impossible for the universe as we have it today to be metered.

"That's the reality. Interestingly, what I have put forward as to why we are where we are, is the lack of trust. There's nothing else but trust. These infrastructures do not do anything but to calibrate usage,"

He argued the government had the opportunity of running the utility for 53 years.

"Government with huge budget at its beck and call could not meter 30 per cent of Nigerians in 53 years, now suddenly, five years down the line, we expect magic to happen.

"It is not possible. I have said this repeatedly, it is terrible fundamentals that make business economically feasible and bankable to make it financially liquid enough for every form of investment to break even, we are not there.

"When we invested at exchange rate of N157 to a dollar, when the tariff did not shift for two years post economic recession with the doubling of exchange rate in an industry that is largely foreign exchange exposed by way of requirement for success," he argued.

He said further that economic reality has made commodity prices to double but tariff remains same.

Nigeria

Govt Must Drop Charges Against Journalist, Says World Press Group

IPI condemns pattern of forcing journalists to reveal their sources Read more »

See What Everyone is Watching

Copyright © 2018 This Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.