News Update
Nigerian Government’s alleged proposal to increase electricity tariffs across bands is drawing sharp criticisms.
Media reports that this comes amid the President Bola Ahmed Tinubu government’s failure to address the country’s electricity supply challenges contrary to his promises before the 2023 general election.
This comes amid controversy surrounding the Federal Government’s reported proposal to increase electricity tariffs in phases.
Recall that Tinubu’s Special Adviser on Power Infrastructure, Sadiq Wanka, had said tariff increment for all customer bands would be implemented in phases.
Although the presidency, at the weekend, dismissed the reports of a planned electricity tariff hike, fear remains that the government may implement the said increment.
Electricity consumers are, however, insisting that the government has no moral justification to increase electricity tariff amid the country’s abysmal power supply.
According to the consumers, the Tinubu administration’s poor performance in the electricity sector is sufficient reason to halt any tariff increase.
Nigeria’s electricity generation currently fluctuates between 3,500 and 4,500 megawatts, virtually the same level recorded since 2023, despite serving an estimated population of over 200 million.
Recall that in April 2024, the Tinubu administration announced an almost 300 percent electricity tariff increase for Band A customers, who were expected to receive at least 20 hours of electricity daily.
However, for many Nigerians, electricity supply has remained unreliable, even for Band A customers, despite the acclaimed reforms introduced under former Minister of Power, Adebayo Adelabu.
Apart from higher electricity tariffs, Nigerians continue to grapple with epileptic power supply and, in many cases, are forced to purchase transformers that are later transferred to the ownership of Electricity Distribution Companies (DisCos).
Fresh speculation about another electricity tariff increase under Power Minister, Joseph Tegbe has further heightened public concerns.
Speaking with correspondent on Monday, the National President of the Nigeria Consumer Protection Network, Mr. Kunle Olubiyo, and the Executive Director of the Electricity Consumer Protection Advocacy Centre, Princewill Okorie, criticised the Tinubu administration for failing to address the country’s power sector challenges.
Olubiyo said Nigeria’s electricity sector would continue to struggle under its current structure, insisting that the country’s 13-year power sector privatisation had failed to deliver meaningful improvements.
He said the current electricity market model was riddled with leakages, poor accountability and policy distortions, making it unattractive to investors.
According to him, the Federal Government’s continued intervention through subsidy payments and market shortfall obligations had undermined the objectives of privatisation.
“The present trajectory, the present model cannot give us results because there are a lot of leakages,” he said.
Olubiyo argued that the government had failed to consistently fund electricity subsidies despite committing to do so, thereby worsening the financial crisis across the power value chain.
“When the government announces responsibility to pay for subsidy and the government is not paying, then we are making a mockery of the definition of subsidy,” he stated.
The energy expert maintained that Nigeria does not yet have a functional electricity market capable of attracting fresh investment.
“There’s no clear-cut path for recovery of investment. No investor is going to come now as it is with the market distortion. We don’t even have an electricity market,” he added.
He also faulted the implementation of the power sector privatisation programme, saying the transitional arrangements had outlived their purpose.
“Nigerian Bulk Electricity Trading PLC, NBET was supposed to operate for an interim period to provide the buffer.
“It was never designed to continue operating up till now. The privatisation has not been properly implemented,” he added.
Olubiyo further alleged that the sector suffers from poor metering, manual energy accounting and human interference, leading to inflated claims and financial leakages.
According to him, many of the costs borne by the government are not backed by scientifically generated data.
“If the process of measurement is not scientific and is manually computed with human elements, there will be errors,” he noted.
He urged the Federal Government under President Tinubu to adopt reforms similar to those implemented in the foreign exchange and downstream petroleum sectors by reducing its financial obligations in the electricity market.
“What the Federal Government has done in the foreign exchange market and in the petroleum subsector, the government should replicate that in the power sector.
“The process we have adopted in the last 13 years is a failure. We cannot continue this way,” he mentioned.
Electricity consumer advocate, Princewill Okorie faulted any proposed removal of electricity subsidies and a possible nationwide electricity tariff hike, describing the policy as another burden on Nigerians without corresponding improvements in power supply.
He questioned the rationale behind the alleged plan to extend the current Band A tariff regime to all electricity consumers, insisting that the government and electricity distribution companies (DisCos) have failed to justify the proposed increase.
He argued that discussions about subsidy removal should begin with an assessment of the quality of electricity services being delivered to consumers.
“Which subsidy are they removing? What is the quality of service delivery in the first place?” he asked.
Okorie maintained that the proposed tariff review would only deepen the economic hardship faced by Nigerians.
“These things are just plots to keep impoverishing the citizenry.
“Is it the subsidy removal that is the issue, or do they just want to keep milking Nigerians?” he queried.
The consumer advocate also questioned the level of investment made by electricity distribution companies despite years of tariff increases and financial interventions in the sector.
“What is the investment of the DisCos? With all the claims being made in the sector, can we conduct an audit of the investments of the DisCos, consumer investments and the collections from electricity consumers?” he stated.
He further called for a comprehensive audit of funds provided to Nigeria’s power sector by international development partners.
According to him, authorities should account for financial support received from institutions such as the World Bank, GIZ and other development partners before introducing fresh tariff increases.
“Audit all the money that the World Bank, GIZ and the international community injected into the sector.
“What percentage of the money has really been used for the good of the people?” He asked.
Drawing a comparison with the removal of fuel subsidy, Okorie argued that Nigerians have yet to experience any meaningful improvement in their standard of living despite higher energy costs.
“They removed subsidy in petroleum. How has it impacted us? Has it improved the quality of life of Nigerians?” he asked.
Okorie also criticised the composition of government committees on electricity reforms, alleging that consumers are often excluded from key policy discussions despite being the ones who bear the financial burden.
“How can a minister set up a committee on the power sector and have the DisCos and GenCos represented, but consumers are not there?
“If consumers are paying the money, why shouldn’t they have a seat at the table?” he said.
(DAILY POST)