OF ELECTRICITY TARRIFS AND INCREASE
In the wake of the proposed increase in electricity tariffs, we strongly believe there is no legal, social or even moral justification for this act.
Our belief is premised on the following:
- Breach of Law:Section 76 of the Electric Power Sector Reform Act, 2005, provides an elaborate consultative process before any tariff increase takes effect. By failing to follow this procedure NERC, the GenCos and DisCos are acting unlawfully and must be stopped.
- Contempt of Court:There is a subsisting court order dated May 28, 2015 by Justice Mohammed Idris of the Federal High Court, Ikoyi, Lagos, in the case of Toluwani Yemi-Adebiyi v. NERC & Others, that there shall be no further increment until the determination of the substantive suit. The implementation of increased tariff is therefore an act of lawlessness in a democracy.
- Breach of Privatization Undertakings:Most consumers are not metered in accordance with the signed privatisation Memorandum of Understanding (MoU) of November 1, 2013, which stipulates that within 18 months gestation period, all consumers are to be metered. Distribution companies have continued to exploit Nigerians using opaque estimated billing system for the majority of consumers whilst deliberately refusing to make available prepaid meters.
- Rip Off/Credibility Question: There is no correlation between the quality of service delivery and tariff. There has been no significant improvement in service delivery. In Apapa where we reside and represent over 2000 residents, our annual electricity bill is about N3.5 Million annually. When we include the cost of diesel and generator repair our electricity cost becomes even more outrageous. In 2015, we spent over N=50 Million on Diesel and generator repairs. When again multiplied by 2000 it is over a N100 Billion annually.
- Insensitivity:The increment at this time negates the present biting and prevailing economic recession which has adversely reduced the purchasing power of ordinary Nigerians and slowed down businesses, including manufacturing. The current hike is not only insensitive but unjustifiable. It cannot stand.
- 6. How Not to Create Wealth:The increment is a clear negation of the current Government’s drive to create wealth through entrepreneurship. By raising the bar in accessing electricity, small businesses are being technically driven away. How can we create wealth when doing business in Nigeria continues to remain a nightmare?
In the light of the above, this unjustifiable increase in electricity tariff is a direct blow on the Change Agenda. If it is allowed to stand, it would put serious question marks on the sustainability of the much lauded ideological change in governance. We therefore, expect the Federal government to urgently review its privatisation contracts with GenCos and DisCos.
In the proposed review, we suggest that at least two (2) year time-frame should be given to firms in the Electric Power Sector to allow them stabilize and provide efficient power supply to Nigerians before they can contemplate any tariff increase. Any such proposed increase must follow due consultation process.
Finally, government must not forget that it owes it as a duty to continue to monitor private partners in this regard. Left on its own, privatization could be a tool for oppression. That is why Government that has the interest of the masses at heart must step in and prevent the greed of a few private actors from obstructing the more enduring project of empowering the general populace.
Dr. Willy Mamah and Collins Okeke
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