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NLC, TUC, CSOs rise against hike in electricity tariff

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Friday, June 23rd, 2023
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The Nigeria Labour Congress, NLC, Trade Union Congress, TUC, and civil society organisations, CSOs, yesterday rejected the planned 40 per cent hike in electricity tariff, which takes effect on July 1, calling on government to shelve the increase.

While the NLC described the proposed increase in tariff as insensitive and callous, TUC said it is the height of insensitivity to the suffering of the masses of the country.

On their part, CSOs asked government to immediately shelve the proposed tariff hike, describing it as unfair and unjustifiable.

It will be recalled that in announcing the tariff increase, Nigerian Electricity Regulatory Commission, NERC, had said the current Service Based Tariff, SBT, was benchmarked on an exchange rate of N441/$ and inflation of 16.97 per cent.

It argued that since the value of the naira to the dollar now hovers above N700 and current rate of inflation at 22.45 per cent, it wis necessary to increase tariff to mitigate operators’ cost of operations.

Taking the lead in opposition to the planned tariff hike, NLC said with with contemplation of increase in school fees in tertiary institutions and already high fees in privately-owned ones, in addition to other costs/tariffs on the way, life in Nigeria could truly be Hobbesian.

The union in a statement by the President, Comrade Joe Ajaero, advised  government to shelve the proposed tariff hike in the collective safety of the masses.

The statement read: “The plan to increase electricity tariff by 40% by July 1 is both insensitive and callous and reflects an organised indifference to the well-being of consumers, especially, the poor masses.

“The massive increase is explained away as a response to the over 100 per cent increase in the pump price of premium motor spirit, otherwise known as petrol.

“Details reveal a movement in inflation from 16.9% to 22.41 (threatening to needle 30), and a shift in exchange rate from N441 to N750.

“We believe not even these figures are a justification for this reckless proposed tariff increase.

The issue of capacity to pay and quality of service delivery are not only germane but superior to any rationalisation by market logic.”

The NLC contended that there had been increases without notice in violation of statutes, saying “the service providers, in spite of sundry support, have not been able to meet the threshold of 5,000 megawatts.

“Coupled with this, there have been surreptitious increases without notice in violation of the statutes.

“The inherent risk in the new regime of tariff is that there is no control, implying that by August, consumers will pay new rates.

“The other risk is that by the time other product or service-rendering entities come up with their new prices or rates, the ordinary person would have been compacted into dust.

“We would want to advise apostles of market who have called NLC all sorts of names to check their conscience.

“The rate at which they are going is highly combative and combustible. With contemplation of payment of increased school fees in tertiary institutions and increases in privately-owned ones, in addition to other costs/tariffs on the way, life in Nigeria could truly be Hobbesian.

“The market economies, which the market fundamentalists seek to emulate, have in place socio-economic safeguards which we do not have.

“In light of this, our advice is that this proposed tariff hike should be shelved for our collective safety.”

Height of insensitivity to suffering masses—TUC

Reacting in a similar manner, the Trade Union Congress of Nigeria, TUC, described the planned hike as the height of insensitivity to the suffering of masses already finding it extremely difficult to cope with the removal of subsidy on petrol.

First Deputy President of the union, Dr Tommy Okon, urged the government to jettison the planned increase because it would compound the socio-economic woes of most Nigerians already over burdened with high inflation and general high cost of living.

He said “This new government should consider the plight of the suffering masses who are already over-burdened with high inflation and general unbearable high cost of living and other socio-economic realities. 

“The government just removed subsidy on petrol which has negatively affected the cost of living and worsened the poverty level across the country. 

‘’The government should not be seen to be insensitive to the plight of the citizens and socio-economic realities in the country. 

“Agreed that the government inherited a bad economy, but policies are not made to worsen the plight of the masses, but to improve the living conditions of the citizens, especially the poor. 

“The planned 40 per cent hike in electricity tariff is the height of insensitivity. The government has set up a committee with organized labour to work out modalities and ways of cushioning the negative effects of the subsidy removal.

‘’But now, the government is already making the expected outcome of the committee useless by the planned hike.   The government should jettison the planned hike.   

Proposed tariff hike unfair, unjustifiable —CSOs

Also reacting to the proposed tariff hike, civil society organisations, CSOs, in the country described it as unfair and unjustifiable.

Reacting yesterday, Kolawole Oluwadare, Executive Director of Socio-Economic Rights and Accountability Project, SERAP, said:  “If it is true that there is, indeed, plans to increase electricity tariff, then it is completely against the obligation of the government to the people. 

‘’With the present state of the economy — removal of fuel subsidy and rising inflation — an increase in electricity tariff is going to further affect the economy more proportionately than any other thing. I think this should not be our priority now because it is going to affect Nigerians negatively.”

Also, the Chair, Board of Trustees,  Amnesty International (Nigeria) and Head of Transparency International (Nigeria), who also serves as the Executive Director Civil Society Legislative Advocacy Centre, CISLAC, Auwal Musa Rafsanjani, urged government to reconsider its decision.

Musa stated: “The current administration must understand that it is only when Nigerians are alive and productive that they can contribute to the economy and overall development of the nation.”

The group further emphasized the need for subsidies in critical sectors such as agriculture, transportation, energy, housing, education, and health to make life more bearable for the average Nigerian.

On his part, Evans Ufeli, Executive Director, Cadrell Advocacy Centre, said:  “The increase is arbitrary because if you look at the Electricity Act, there is a provision for consultation with consumers as to what price is workable for both parties. 

‘’Unfortunately, that section has been discarded. Between 2021 and 2023, there has been an increase five times and in each case, the consumers were not consulted.  

‘’There is need for some level of resistance to this planned increase. People should not stand aloof and allow such increase which will further impoverish the masses.” 

Similarly, Felicia Onibon of Change Managers International Network Nigeria, said the proposed increase in tariff is unfair and will have negative implications for various aspects of the economy.

“It would lead to increased overhead costs for all businesses in the country, create hardship for young people who rely on cheap and affordable electricity to study at night or early hours of the day, and harm the environment by forcing families to resort to other forms of energy that can negatively impact the ecosystem.”

Also reacting, Princess Hamman-Obels, Director of the Initiative for Research, Innovation and Advocacy in Development, IRIAD, echoed Onibon’s sentiments, calling the proposed hike “anti-people, anti-poor and most insensitive to the Nigerian people.”

Hamman-Obels criticized the current administration for introducing harsh policies without consulting the people, stressing the importance of timing in policy implementation to allow for adjustment and adaptation.

In his reaction, Deji Adeyanju, convener of Concerned Nigerians for the Protection of Human Rights and the Rule of Law Initiative, also slammed the proposed increase as “unjustifiable and unfair.”

Adeyanju pointed out that under previous governments, Nigerians paid significantly less for energy, arguing that the current administration is out of touch with realities faced by the people.

“All over the world, even in advanced countries, the government subsidizes energy because of its pivotal role in driving the economy, supporting education and health sectors, and generally improving the well-being of the citizens. Why is Nigeria’s case different?” Adeyanju queried.

The tariff hike, which comes amid a monthly subsidy of about N50 billion in the electricity sector due to revenue shortfall, is set to challenge President Bola Ahmed Tinubu administration’s market reform efforts.

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