Former Vice President Atiku Abubakar has expressed significant concerns over the recent hike in electricity tariffs, emphasizing that the increment will impose additional burdens on Nigerians already grappling with economic difficulties. Atiku’s remarks come in the wake of the Nigerian Government’s decision to completely remove subsidies from electricity tariffs for Band A consumers, who represent approximately 15% of power users nationwide. This move saw the tariff rate soar to N225 per kilowatt-hour from N68/kWh, marking a staggering 240% increase.
The Context of Economic Reforms
Atiku highlighted that the tariff hike arrives at a particularly challenging time for Nigerians, who are already contending with the effects of petrol subsidy removal and the floating of the naira. The combination of these reforms has heightened inflationary pressures and compounded the economic woes faced by the populace. According to Atiku, the government’s approach to implementing these reforms lacks adequate preparation and consideration for the hardships they impose on citizens.
The Impact on Industry and Economy
Further elaborating on the repercussions of the electricity tariff increase, Atiku pointed out that the manufacturing sector would be severely impacted. Manufacturers are now faced with the dual challenge of coping with higher operational costs, such as increased diesel prices and higher wages due to the new minimum wage, while also contending with elevated interest rates on bank loans. Atiku criticized the government’s economic policies, suggesting they lack empathy and risk plunging the economy into a deeper crisis.
Call for Reevaluation and Strategic Reforms
In his critique, Atiku urged for a comprehensive evaluation of the root causes behind the inefficiencies in the power sector. He advocated for revisiting the privatization process that led to the creation of Distribution Companies (DISCOs) and called on President Bola Tinubu to sequence reforms more thoughtfully. Atiku stressed the importance of implementing measures to alleviate the impacts of these reforms and holding the Nigerian Electricity Regulatory Commission (NERC) accountable for ensuring improved service delivery in the power sector.
States’ Response to Electricity Challenges
In response to the Federal Government’s tariff adjustment and the broader electricity supply issues, Lagos, Kano, and ten other states have advanced plans to generate their power. These efforts align with the provisions of the Electricity Act 2023, indicating a push towards greater autonomy and regulatory independence from NERC in managing state-level electricity markets.
Widespread Criticism and Calls for Reconsideration
The tariff hike has triggered widespread criticism from various stakeholders, including the Petroleum and Natural Gas Senior Staff Association of Nigeria, civil society organizations, and the Nigeria Electricity Consumer Advocacy Network. These groups warn that the increased tariffs will exacerbate the financial strain on Nigerian households and businesses, urging the government to reconsider its approach to utility pricing and sector reforms.
As discussions and debates unfold, the calls for a more humane and strategically planned approach to economic and utility reforms in Nigeria grow louder, with stakeholders from various sectors urging the government to prioritize the well-being of its citizens in policy formulations.
