In a decision that has triggered widespread condemnation, the Nigerian government, through the Nigerian Electricity Regulatory Commission (NERC), has unveiled a substantial increase in electricity tariffs for Band A customers. This segment, which constitutes approximately 15% of the nation’s power consumers and was promised up to 20 hours of daily supply, will now face a tariff of N225 per kilowatt-hour (kWh), marking a staggering 240% surge from the previous rate of N68/kWh.
The announcement has met fierce opposition from both manufacturers and organized labour. The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) have collectively expressed their disapproval, underscoring the potential adverse effects on the economy. They contend that the heightened costs will severely impact manufacturers, worsen inflationary pressures, and impede the growth of small and medium enterprises (SMEs). Moreover, they cast doubt on the actual availability of the promised 20-hour daily power supply, questioning its realization anywhere in Nigeria.
Subsidy Removal Deepens Discontent
The government defends the tariff hike by citing the unsustainable nature of electricity subsidies. Musiliu Oseni, Vice Chairman of NERC, has emphasized the necessity to rein in the projected N2.9 trillion expenditure on power subsidies for 2024. Nevertheless, the complete elimination of subsidies for Band A customers has drawn criticism. Manufacturers and labour unions caution that it will force businesses into closure, thereby placing additional financial burdens on consumers grappling with escalating electricity expenses.
Adding to the discontent, NERC has purportedly reclassified some customers previously categorized under Band A. This means that even those who may not have consistently received 20 hours of power will now be subjected to the higher tariff.
The announcement has cast a shadow over the government’s initiatives aimed at revamping the nation’s power sector. With mounting dissatisfaction from key stakeholders, the days ahead may witness further developments regarding the contentious tariff increase.
