With the recent announcement that Nigerians would be made to pay more for electricity, several reactions were spontaneously provoked. Minority Leader of the House of Representatives, Hon. Ndudi Elumelu, also last week offered his opinion on why the move should be discarded. JOSHUA EGBODO takes a look at the concerns, including past interventions of the House of Reps in the electricity sector.
Genesis of current debate
As Nigerians wind down the yuletide, news filtered in that the Nigeria Electricity Regulatory Commission (NERC)) had issued a directive to the 11 distribution companies (DISCOs), to increase electricity tariff with effect from January 1, 2020. The move, understandably sparked off nationwide agitations in view of the poor state of power supply across the country.
A communication to that effect, jointly endorsed by the Commission’s Chairman, Prof. James Momoh, and its Secretary, Mr. Dafe Akpedeye was published on the website of NERC, where they claimed that the planned tariff increment was among other things, geared towards addressing deficiencies in the pursuit of resolving the impairment of the financial records of the DISCOs.
Justification, denial
The Commission which had earlier justified the move, seemingly backtracked when it was obvious that many stakeholders appeared not comfortable with the new tariff regime. The chairman, after viral reports of its December 31, 2019 order explained that there was no plans for immediate increase in electricity tariff. “There is no immediate increase in tariff for customers”, Momoh said in media reports, insisting that widely reported order was only a review that is yet, subject to public consultation.
“The proposed tariff review is what we are mandated to do as a regulator. We did the first one around June, January is here, we have done it. We have no option than to do our jobs. We have done the review and it is subject to public consultation. In the next three months we will engage you for consultations. We have given the report card of what we saw based on all indices for doing the review. We did not say it is binding tomorrow morning.
“We said we are going to the second thing: consultation. The order is simply a communication of what we have done as a regulator looking at what it takes to increase or decrease tariff. If at the end of our meeting back and front, we say increase there is increase. If we say no increase, no increase. It is going to be based on our engagement at the public forum. We are going to issue a press statement for one more time on this document (the order), in a layman language. That is the one you will all work on. No increase to tariff”, the NERC boss told reporters last week.
Stakeholders kick
Prior to the denial of plans for tariff increase, following the publication of the order, the opposition Peoples Democratic Party (PDP) was in the lead of other critical stakeholders, including electricity consumer groups and civil rights advocacy bodies who were already up in arms against the move.
PDP described the planned hike in electricity tariff as unacceptable, noting that the increment which would be in the region of about 200 percent was rejected in its entirety, as to it, the move was draconian as well as against the interest and good of Nigerians. The party in its statement on Sunday therefore urged the Federal Government to immediately rescind the decision which it termed as being “obnoxious and provocative”.
According to the PDP, through its spokesman, Mr. Kola Ologbondiyan, “It is lamentable that Nigerians, who are already suffering the devastating negative impact of the recent increase in the Value Added Tax (VAT) from 5 percent to 7.5 by the APC administration, are now being further suppressed with increased electricity tariff. Our party holds that the increase in electricity tariff, under the prevailing harsh economic conditions, is injurious to the well-being of Nigerians as it will further stress the productive sector and lead to an upsurge in the cost of regular and essential goods and services, including food, medicine, housing, education and other critical needs.
“This APC policy, if allowed, will worsen the suffering of Nigerians as it will put more stress on already overburdened families, cripple businesses, result in job losses and exacerbate the prevailing frightening unemployment rate under the Buhari administration.
“Moreover, the PDP invites Nigerians to note that this toxic and distasteful ‘new year gift’ by the APC administration, at a time Nigerians are coming back from yuletide festivities, shows that the APC is indeed unfeeling, insensitive and have no iota of regard for the sensibilities and well-being of our citizens”.
There were similar reports of official responses in rejection of the move by electricity consumer groups such as the Energy Consumers Rights and Responsibilities Initiative, the All Electricity Consumer Protection Forum, and a civil society organisation; the Human Rights Writers Association of Nigeria (HURIWA), who separately expressed dissatisfaction with the planned hike, in view of the extant realities.
Reps’ previous interventions
Feelings of Nigerians about unfair treatment over electricity tariff first got an official attention of the House of Representatives in the life of its 8th assembly, when the then majority leader, and now speaker, Hon. Femi Gbajabiamila sponsored a bill seeking to address the issues. It was all anger on floor, as debate on the general principles of the bill, which sought to prohibit the use of estimated electricity tariff for consumers in Nigeria.
Intended to amend the Electricity Sector Reform Act, the further sought to criminalise deliberate refusal of any of the DISCOs to provide prepay metres to customers on request within 30 days.
Gbajabiamila in defence of the proposal described the use of estimated billing for electricity consumers in Nigeria as a modernized scam, employed by the DISCOs against helpless citizens, adding that he personally initiated the bill to prohibit the use of estimated electricity tariff, through which consumers have been held to ransom, “and exploited on a monthly basis”.
Expressing his personal experience, even as an elite Nigerian, then Speaker of the House, Hon. Yakubu Dogara said the pains ordinary citizens went through daily could only be imagined under the estimated billing system, as his not-always-occupied village house at Bauchi was usually given N80,000 monthly estimated bill for supply that is seldom seen, until he had to personally request that it be disconnected. A lot more members similarly expressed such disappointments.
The bill though got through a third reading in the House, but unfortunately failed to gain the expected concurrence of the Senate before the tenure of the 8th assembly elapsed.
Government bailout
Still with such concerns, the House launched a probe into reported bailout to distribution companies by the federal government, through the Central Bank of Nigeria (CBN). Making presentations before an Ad hoc panel specifically put in place to engage stakeholders and find a way of halting excessive electricity billing of Nigerians, the apex bank governor, Mr. Godwin Emefiele in 2018 confirmed that not less than N158. 74 billion was disbursed by the federal government to DISCOs and generation companies (GENCOs) and other service providers in the electricity sector.
To Emefiele, the funds were issued under the CBN-Nigerian Electricity Market Stabilisation Facility. According to him, seven DISCOs received N49, 841, 913 billion, 18 GENCOs got N73,545,871 billion, six Gas companies got, N24,892,952 billion while service providers were paid N10,463,904,265 billion, adding that in order to ensure electricity become efficient, the apex bank also intervened by providing a payment assurance facility and has so far disbursed N330 billion out of a projected N701 billion.
“The intention is that power should continue to be supplied while the sector sorts itself out in the following areas: reduce the losses that have plagued the industry, increase collection and arrive at a realistic tariff that phases out shortfalls”, he said.
Wither the bailout results?
With such interventions in the form of bailout, Nigerians are therefore asking questions on how such were applied, as there seemed to be no visible impact of such funding. Also queried was the justification for the planned astronomical hike in electricity tariff at the moment, even as same was denied but not completely ruled out. Beyond the protests against the move, analysts are of the opinion that a deeper searchlight should be beamed into activities of those saddled with the responsibility of managing the power sector.
These concerns were borne of the fact that nothing has been on ground to show that the sector is at the moment in private hands, which should by all standards be more efficient under the existing arrangement.
Reps again
The latest published order on the planned tariff increase, yet got attention of the House of Representatives last, but this time, through the opposition caucus. A statement dated January 8, 2020 by the Minority Leader, Hon. Ndudi Elumelu did not minced words in condemning the move in its entirety.
Elumelu in the statement tilted; ‘STOP CONTEMPLATING ELECTRICITY TARIFF HIKE’, cautioned NERC against the plan, maintaining that any increase in electricity tariff will further exacerbate the economic situation in the country, as it will worsen the already excruciating financial burden on homes, personal businesses, companies and the overall productive sectors.
According to the lawmaker, “Nigerians are currently passing through grave economic stress and anything that would aggravate the situation, such as an increase in electricity tariff, is completely unacceptable”.
He argued that electricity is pivotal to the economic and social lives of Nigerians and urges NERC to rather seek ways of making power affordable and available to Nigerians, in line with its establishment laws, instead of increase in tariff, giving assurance that the minority caucus will continue to protect the interest of Nigerians in this regard, by monitoring prevailing tariff on electricity as well as levies on other essential services in the country to ensure that Nigerians are not overburdened.
Elumelu subsequently tasked all members of the minority caucus spread across committees of the House, to intensify oversight functions in this direction, chiefly in the interest of Nigerians.
Wrong approach
To many followers of the recent development, the modus adopted by NERC was akin to taking the citizens for a ride. To them, it should have been wide consultation first, and not the other way round as adopted. With more public enlightenment and consultations being promised, Nigerians are waiting waiting for the outcome.
