Rédaction Africa Links 24 with Tribune Editorial Board
Published on 2024-04-09 04:30:56
The Nigerian Electricity Regulatory Commission (NERC) recently announced a significant increase in electricity tariffs for consumers who receive power supply for 20-24 hours daily. This increase affects users classified as Band A, comprising approximately 15 percent of the total electricity consumers in the country. These consumers will now be charged N225 per kilowatt-hour, marking a substantial rise from the previous rate of N68/kWh. The sudden 240 percent hike in electricity tariffs raises concerns about its impact on manufacturers and businesses within the Band A category, as it will likely lead to higher production costs and ultimately, an increase in the prices of goods.
At a time when many citizens are already grappling with the effects of fuel subsidy removal last year, the government’s decision to implement such a steep tariff increase is puzzling. It calls into question the government’s commitment to stabilizing the economy amidst existing hardships. Strict adherence to economic policies recommended by international institutions may not always be suitable for developing economies like Nigeria, which lack the necessary structures to withstand economic shocks. The relentless pursuit of removing subsidies without considering the repercussions on the population is shortsighted and may exacerbate poverty and misery.
Manufacturers and organized labor have voiced their opposition to the tariff hike, warning that it could drive businesses into insolvency and worsen inflation. The withdrawal of electricity subsidies for Band A consumers signifies a drastic policy shift that many find unreasonable. The swift implementation of the new tariff structure has sparked outrage among various sectors, with threats of nationwide strikes looming. The lack of adequate power supply further complicates the situation, as industries rely on costly alternatives like generators to meet their energy needs.
The tariff hike is poised to have detrimental effects on the manufacturing sector, potentially leading to more job losses and economic disruptions. The government’s failure to provide reliable power infrastructure at reasonable prices presents a stark contrast to its rhetoric on improving the ease of doing business in the country. The discriminatory pricing based on the number of hours of power supply underscores the government’s inability to address the power supply crisis effectively, despite substantial investments in the sector.
It is imperative for the government to prioritize addressing the inadequate power supply before implementing further tariff increases. The lack of a clear timeline for ending the band categorization and price discrimination raises doubts about the government’s commitment to resolving the power sector’s challenges. At a time when consumers are already struggling with reduced disposable incomes, any hike in tariffs should be justified by improved service delivery. The current tariff increase by NERC is deemed unjust, inhumane, and illogical, further compounding the hardships faced by citizens and businesses.
Adequate power infrastructure is essential for economic growth and development, yet Nigeria continues to grapple with persistent challenges in this area. The government must focus on enhancing power generation, transmission, and distribution without resorting to drastic tariff hikes. Citizens and businesses deserve tangible benefits from government interventions, rather than being burdened with additional financial strains. The government’s approach to the power sector should prioritize sustainability and affordability to ensure the well-being of its populace.
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