NIGERIAS ELECTRICITY: THE TARIFF QUESTION.

Nigerians woke up one recent morning to be greeted with news of an upward

review in electricity tariff. The National Electricity Regulatory Commission

(NERC) and the Minister of Power, Works and Housing, Mr Babatunde Fashola,
had late last year given a hint of the imminent increase, and have now gone
ahead to announce a 45% increase in one fell swoop, with effect from 1,
February, 2016.
To justify the decision, NERC and the minister argued that the upward review
would stimulate more investment in the power sector and increase
generating capacity, thereby stabilizing supply. Under President Obasanjo, a
colossal $16 B was said to have been injected into the sector for
infrastructural development in his 8 years of rule as civilian President,
without any noticeable improvement in power supply.
In early 2013, the Federal Government under President Goodluck Jonathan
privatized the power sector and sold the assets of Power Holding Company of
Nigeria (PHCN) to private electricity distribution companies known as Discos.
This was with a view to stamping out endemic corruption in the sector and
achieving relative stability in supply. Nigerians were promised that by the
end of 2013, power generation would rise from about 3,000MW to
10,000MW. Today, six years later, generation has remained under 5,000MW,
and power supply erratic or near-inexistent.
On Monday, 8 February, 2016, the organized labour unions called out their
workers all over the country in protest against the tariff hike.
What do Nigerians think about the tariff increase? The Security Watch went
about town to sample the views of a cross-section of Nigerians.
Taye is a barber in Ikorodu area of Lagos. He says, This is not fair; this
government is wicked. The bill is already high and now they want to increase
it further. This is not the change we voted for.
Segun Adebayo is a welder: Most of the time we dont even have power; we
use our generator almost every day. We have been paying for darkness. I
think they should wait for the power to improve first.
Roland runs a supermarket in Lagos. In his view, Fashola is a tax collector.
When he was in Lagos as governor, he imposed all manner of taxes and
made life uncomfortable for Lagosians. Now he has taken it to the federal
level. Nigerians should resist it,

John Bamidele is a bank worker. Quoting from the Bible, he asks, Who
would begin construction of a house without first calculating the cost to know
if there is enough money? The investors ought to know that power projects
are capital-intensive, and that they cannot recoup their investments in the
short run. It is absolutely wrong and unacceptable to impose a whopping
45% increase all at once. It shows that these businessmen are unscrupulous
and were not prepared for the business. The increase should be phased and
spread over a number of years. Let their advisers advise them properly.
Paul, a school teacher, in an angry tone, says, Why are Nigerians
complaining now? Didnt they know that this would happen when they voted
for Buhari? They voted for change and they are getting the change. In fact,
let them increase it more!
Bolu is an IT professional. In his opinion, Privatization means that private
businessmen are taking over the business. A businessman going into a
business must have the required capital and equipment before venturing into
it. Nevertheless, we heard that government gave them financial support in
form of bailout sometime ago. So why the increase?
Mrs. Kisit Pratt is a shop owner on Victoria Island, Lagos. In her view, If the
tariff increase will lead to stable power supply, then I think we should support
it. Afterall, we have been spending more money buying diesel for
generators.
Michael Kola, a landlord, thinks that government is putting the cart before
the horse. They should first of all stabilize power supply and distribute prepaid meters to all consumers to ensure fairness in billing.
Mr Bidemi is a Business Development Manager in Ebute Meta area of Lagos.
In an interview with The Security Watch, he expressed bitter resentment
against the arbitrary and outrageous billing system of the Discos. According
to him, his organization received a monthly bill of N132,000 for three office
floors and a penthouse, none of which employs heavy electrical machinery.
The situation, he said, was so bad that he was compelled to write to the
electricity company and request disconnection. Disconnection was
eventually approved and effected about six months ago, despite which the
bill not only keeps coming but without variation. The organization has since
been running on its private electricity generating system which Mr Bidemi
believes is considerably cheaper.

Most Nigerians have condemned the tariff hike as too sudden, too drastic
and unnecessary; and the people and the government are now at daggers
drawn. The price of oil, which produces about 70% of Nigerias revenue, has
plummeted to an all-time low of $32 per barrel. The ripple effects on the
economic indices in an import-based economy are far-reaching. With the
prices of goods and services soaring and the level of unemployment so high,
Nigerians see the tariff hike as one bitter pill too many. Where they go from
here, time will tell.