Electricity tariffs hike as cut-throat

SEGUN IMOHIOSEN looks at the seemingly unending trouble with the nation’s power sector vis-a-vis efforts of successive administrations to correct the trend, and cautions on the planned increase in electricity tariffs. 

This perennial power saga that has plunged Nigerians into the throes of anguish and hardship over the years, needs a more pragmatic approach from the government now more than ever before in order to create a conducive socio-economic environment for the people. There is need for proper planning as population keeps surging.

The poor Nigerians have been hard hit by the waves of  insensitivity of the DISCOS with regards to regular tariffs review that make the poor Nigerians pay more for the electricity they hardly enjoy.
Bearing in mind the subsisting economic reality on ground today, to ask Nigerians to pay more tariffs for electricity would be gagging the people who have already been overstretched by the reason of the constraint in economic activities that have translated to little or no resources to lots of Nigerians today.

To allow this hike,  would be yet another untoward distress meted out to Nigerians which appears rather punitive in nature, and most uncalled for. Forty percent increase is unfortunate, rather undeserving, too bogus and would be most unbearable. In this context, the matter arising as it were, is, what exactly is the standpoint of the Federal Government in all of this?
In retrospect, sometime February 2014, there was this talk shop captioned ‘Power Sector:

Nigerian Government Organises Talk shop On Power Sector Financing”. It was a fantastic piece of information that ordinarily whet the appetite of Nigerians who have longed over the years, to see Nigeria  out of the seizure of everyday blackout. Anything that would address and bring succour on electricity is welcomed by Nigerians. Interestingly, the conference held at the State House Banquet Hall while the thrust of the conference hinged on the transformation agenda of GEJ, which anchored on vision 20:2020 – focused on building institutions to drive robust road maps of reform in key sectors of the economy, with the Power Sector Reform being a pivot.

Key players in the conference were Ambassador Godknows Igali, then and till very recently Permanent Secretary,  Ministry of Power, and  chairman organising committee. Vice President Namadi Sambo as chairman  of the National Council on Privatization, was directed by Mr. President to convene an international conference to facilitate the funding of the Power Sector infrastructure development of the country to achieve the required modernization, expansion and overall enhancement of electricity service delivery.

Ultimately, the direct beneficiaries of these fund influx are the Transmission Company of Nigeria, the DISCOS, GENCOS, NIPPs, the emerging IPPs and other Sector Service Providers. He called on prospective investors and financiers to participate in the conference which would afford them the opportunity to physically sight and comprehend the magnitude of emerging opportunities in the Nigerian Power Sector; adding that “it is reckoned that this will be a great impetus to trigger their interests in investing expeditiously.”

So, having sighted this so-called magnitude, what suddenly went wrong when the said assets were acquired? What were the mindsets of these investors when they gallantly opted for the acquisition of PHCN Assets when government chose to privatise? How on earth did they hope to run the business from inception? The truth is, when the country unbundled the power monopoly and the DISCOS bought the power assets, if they didn’t  have money to inject into the business, why go into it in the first place? It is very clear that the DISCOS borrowed money to buy the assets. Were the DISCOS expecting government to run the business for them? To make Nigerians pay more for electricity is conscienceless, unconscionable and ultimately devilish in approach.

From all of these outfalls, it is almost apparent that the DISCOS are somehow from within the same group that sold them out. That may partly account for the time to time bail-out for these so-called private investors. At some point in 2014, the National Economic Regulatory Council (NERC) insisted on investments to strengthen distribution networks. Can the DISCOS tell Nigerians how much of their monies they have invested?
It is significant that the Nigerian publics see for themselves the purpose of that conference, but today what is happening with the DISCOS leave little to chanceMeaning, the burden of their investment now lies on the shoulders of the poor citizenry who are to be made to pay higher tariffs for the electricity they barely enjoy.

Would we say that the enormity of the investment is weighing them down to the point that poor Nigerians should be scapegoats to bear the brunt? What was the mindset from the very onset when the DISCOS were opting for the acquisition of the assets?
For the record, there was a time in 2014 when the Labour and FG disagreed over tariff increase and now again at 40%. Nigerians should be wary of this latest antics.  Why would there be any increase in electricity tariff when there hasn’t  been any appreciable improvement in power? The point is, sometime the FG gave over #200 billion (Two Hundred Billion Naira) to these companies as a bailout at no interest or cost.

That is the tax payers money that the latter cannot benefit from. Why would the Federal Government dole out so much funds to these private investors without any positive impact on the poor Nigerian consumers?  Moreover, there is this fixed monthly tariff, irrespective of whether one uses electricity or not.  But the fact is that the investors should inject more funding into their business until such a time they can begin to reap the dividends of their investment. However, upon these various bail-outs, who is bailing the poor Nigerians out who is made to pay more tariff?
It is apparent that the DISCOS have been over pampered by the government at the expense of the poor Nigerians by reason of the largesse doled out to them. They are spoon-fed as infants.

The era of instant coffee and instant milk is over. So, to keep treating these companies as overgrown babies with no proper hormonal make-up fit for the responsibility they brought upon themselves is maleficent. When the 11 distribution companies were handed over to the private investors, did they imagine that the companies will run by themselves without investing more money?
It is important that import of metres and other electricity equipment that could be locally sourced be discouraged to make room for local manufacturers businesses to thrive. There are metres, transformers, cables and concrete poles manufacturing companies here in Nigeria that Government with its might ought to put its weight behind to ensure that these local manufacturers be patronised which will make room for more direct investment that would translate into Naira regaining its value.

if  recent media reports are anything to go by, it would not be out of place to say  the NERC boss, Sam Amadi  is holding briefs for these investors. This, as far as the Nigerian populace is concerned, is uncalled for. The question seriously is, on whose side is the NERC? What would the government do to cushion the suffering of Nigerians when tariffs are hiked? Are the consumers to provide the funds to be invested? I think the reverse is supposed to be the case. The investors need to spend their money while the return on the investment will make them smile to the bank afterwards. What then is the essence of the CBN giving out loan at almost no interest to the DISCOS without impacting on the citizenry?

Segun Imohiosen writes from Abuja.