THOUGHTS ON THE NEW ELECTRICITY TARIFFS

The new tariff regime will deepen social inequity, and reduce the quality of life of majority of Nigerians, argues Austin Tam-George 

According to a new power distribution plan approved by the National Electricity Regulatory Commission (NERC), certain segments of the Nigerian population will henceforth have regular electricity and pay more, while the rest of society will see far less electricity supply and pay a lower tariff.

If this Orwellian electricity plan is followed through, the Nigerian middle class as well as the urban and rural poor, who constitute the majority of the country, will most likely retreat into medieval darkness.

From a policy standpoint, below are three downsides of the new electricity plan:

It promotes social inequity: Electricity is much more than cables, light bulbs, and switches. In developmental terms, electricity is a crucial thermometer by which the quality of modern life is measured. In fact, no definition of modernity can be complete without a people’s access to electricity.  

This is why governments all over the world see the provision of electricity to their citizens as an important responsibility. Therefore, any policy that segregates access to such a basic and essential service strictly on the basis of economic and social stratification of citizens is a short-sighted policy and needs to be reviewed. 

The new electricity supply regime will deepen social inequity in the country, and reduce the quality of life of majority of Nigerians who are set to see far less access to electricity simply because of where they live. This is social apartheid à la carte. Rather than reduce supply to most citizens, the government and its private sector partners should increase, prioritise, and guarantee regular electricity supply to all citizens.

When Brazil faced an unprecedented economic and social regression in the late 1990s, the government of President Lula Da Silva (2003-2011) rolled out the most audacious and inclusive economic recovery plan that pulled millions of people out of poverty. The resulting economic recovery propelled Brazil ahead of Britain as the fifth largest economy in the world for the first time.

Nigeria needs an inclusive and robust economic and job creation plan that can increase people’s capacity to pay for social services and live meaningful lives.

 It will deepen economic woes. All over the world, reliable and uninterrupted electricity supply is seen as the ultimate tonic that spurs economic growth. 

Nigeria has the largest informal sector in Africa, with micro, small, and medium-sized businesses accounting for over 40% of the country’s GDP and 70% of employment. These businesses range from subsistent fish farms in rural communities, to vibrant, youth-led innovation hubs in informal urban settlements across the country. 

A segregationist electricity supply policy that excludes this productive swathe of Nigeria’s population will spell disaster for an already beleaguered Nigerian economy. In an age when Finland has made Internet access a constitutional right, with a stipulated bandwidth guaranteed to every citizen, Nigeria cannot afford to pursue an energy policy that is guaranteed to sentence majority of its citizens to live in darkness. 

 Where are the meters? Nigeria generates an average of 5,000 megawatts of electricity for a population of over 200 million people. This is grossly inadequate, when compared to South Africa, which generates over 50,000 megawatts for its 60 million citizens. Yet, Nigeria has perhaps one of the most unpredictable energy consumption audit systems in the world. 

 According to a recent report by NERC, only 44% of electricity consumers in Nigeria have metered connections. This means that 56% – a vast majority of energy consumers, are subjected to an opaque and extortionate “estimated billing” system that leaves consumers feeling duped. With so many homes and businesses without metered connections, each month, electricity officials act like ancient Egyptian stargazers, by sending consumers “estimated bills” plucked from the cosmos of corruption. 

It is a stunning self-indictment that the National Electricity Regulatory Commission has allowed such a capricious practice to continue for so long. The new electricity tariff regime does not address the important problem of inadequate metering and the systemic corruption that it breeds.

Finally, to address the crisis, the government and its private sector partners should keep the focus on generating sufficient and uninterrupted power supply to all citizens. This can be done through a power consumption audit system that is universally metered, fair, accountable, and transparent.

Dr Tam-George is a former Senior Executive Fellow at Harvard Kennedy School, Cambridge, Massachusetts. attamgeorge@gmail.com