…Say it’s Ill Timed, Will Undermine Citizens’ Purchasing Power

The umbrella labour organization, Nigerian Labour Congress (NLC) and a leading pro poor group, ActionAid Nigeria, have decried the proposed increase in electricity tariff recently approved by the Nigerian Electricity Regulation Commission (NERC) for Electricity Distribution Companies (DISCOS) across the country, slated to come into effect on Wednesday, September 1, 2021, arguing that the move is ill timed and will undermine the purchasing power of the people who are already reeling under the pains of rising poverty.

In a letter to the Honourable Minister of Power titled, “NOTICE ON SPECULATIONS ON INCREASE IN ELECTRICITY TARIFF,” the NLC said,

“We wish to draw your attention to the wave of speculation especially as widely reported in the media that there are fresh plans to grant approval to Electricity Distribution Companies to hike electricity tariff.

“We write to remind the Honourable Minister that Organized Labour on September 28, 2020 through the Federal Government – Organized Labour Committee on Electricity Tariff agreed to freeze further increases in electricity tariff until the committee concludes its work and its report adopted by all the Principals in the Committee.

“It is in light of this that we dismiss the ongoing speculation on increase in electricity tariff as mere speculations.

“We, however, find it prudent to put you on notice that should government make true the swirling speculation by approving an increase in electricity tariff, Organized Labour would be left with no option than to deploy the industrial mechanisms granted in our laws for the defense of workers’ rights,” the letter signed by NLC President, Mr Ayuba Wabba stated.

Speaking in the same vein, ActionAid Nigeria, a non-governmental organisation working to eradicate poverty in Nigeria, has also slammed the alleged resolution by the NERC directing the 11 Electricity Distribution Companies (DisCos) to increase their tariffs from Wednesday, September 1, 2021.

ActionAid Nigeria posits that the increase in electricity tariff will further erode the purchasing power of Nigerian workers in formal and informal sectors and will further impoverish more Nigerians.

Speaking in Abuja, the organization’s Country Director, Ms Ene Obi said “The increase in electricity tariff is not only ill timed but insensitive to the precarious plight of Nigerians whose lean disposable incomes are already decapitated.

“ActionAid’s position is hinged on the premise that previous hike in electricity tariffs had not translated to effective and regulatory strategies to manage the impact of such hikes on macro-economic indices affecting end-users that are currently economically crippled and trapped”.

She also reminded the Federal Government “that more than a hundred million Nigerians are living below the poverty line”

“Instead of this tariff hike, NERC should compel all the actors in Nigerian Electricity Supply Industry to ensure increased efficiency in the power sector including managing energy loses to make erratic power supply a thing of the past as a way of boosting productivity and Nigeria’s GDP.

“We urge NERC to rescind this decision and ensure that the Nigerian Electricity Supply Industry improve its performance before considering a tariff increase.

“If this purported decision is not reconsidered, the cost of production of basic items produced in the country will increase and this may also lead to job losses in the already ailing medium and small-scale industries in Nigeria.

“Investors who rely largely on power supply will obviously not be able to break even. To remain afloat, they will have to shift the burden of increased cost of production to the final consumers of their products and services in an economy already choked by inflation”.

“ActionAid Nigeria therefore calls on the Nigerian Electricity Regulatory Commission (NERC) and the Federal Government, to halt the planned electricity tariff increment and uphold its values of transparency, fairness, and accountability by ensuring continuous consultation with the masses while protecting consumer rights,” the organization says.

The last increase which was effected early in the year was greeted by nationwide protests and outcry by the NLC, Trade Union Congress and other civil society organizations.

The Nigerian Electricity Regulatory Commission (NERC), under the Service Based Tariff (SBT) programme, had designed an incremental tariff with an upward review due in September 1.

The SBT came into force last year, increasing the cost of electricity by over 50 per cent, as government moved to halt subsidy in the electricity sector and allow the Nigerian Electricity Supply Industry (NESI) generate enough funds to finance the bed-ridden market.

President Muhammadu Buhari had, in September last year, stridently defended the increase in electricity tariff tagged Service Based Tariff (SBT), maintaining that it was the only option to improving power supply to the masses.

Although analysts say the SBT may have succeeded in raising revenue collection in the sector by above N260b, but it has impoverished the masses while electricity supply remains dismal. This is dogged by perpetual outages and collapse of transmission and distribution infrastructure.

Amidst this, some distribution companies already informed consumers that a new tariff would be implemented this week.

A document from the Eko Electricity Distribution Company, dated August 25, 2021, with reference number 023/EKEDP/GMCLR/0025/2021 showed that the tariff would increase from N42.44 to 58.94 depending on the class. The new tariff is expected to be in place till December before further increment takes place in January next year.

Across the band, the increase remained N2 from the tariff paid between July and August. In a dramatic twist, the Ikeja disco later denied that any increase was in the offing.