Democratic Socialist Movement

For Struggle, Solidarity and Socialism in Nigeria

By - DSM


  • For an Affordable and Uninterrupted Power Supply

The planned electricity tariff hike scheduled to take effect on July 1, 2023 was suspended by the Electricity Distribution Companies (DISCOs) due to mass public outcry. Following the capitulation of trade union leaders in 2020 arising from the botched strike against electricity tariff hike and petrol hike, Nigerian Electricity Regulatory Commission (NERC) gave a blank check to the DISCOs to increase electricity tariff biannually. Hence, between September 2020 and now, tariff have been quietly increased at least 4 times leading to a rise from N21 to about N60 averagely depending on the discriminating supply policies of the DISCOs. As of November 2013 when the power sector was privatized, tariff was about N13 kwh. Since then, there have been more tariff hikes in terms of cumulative amount in a little less than 10 years of privatization than more than 4 decades of NEPA/PHCN- over 400% increment in an economy wherein income had stagnated and largely eroded through rising cost of living.

By Chinedu Bosah

Unlike in the previous 3 years when the DISCOs and NERC quietly increased tariff, this time around, there was more publicity around the planned tariff hike and public outcry which forced a suspension. To be clear, the suspension is only for now. The DISCOs and their regulatory collaborator (NERC) have always manufactured reasons to justify unending tariff hikes in their profit pursuit and massive exploitation. The traditional reasons are inflation, gas price, and foreign exchange rate. A new parameter has now been added. It is called technical and commercial losses arising from energy theft and the DISCOs put it at about 40%. The financial component affected by foreign exchange, which should be a small portion, given that the business model is dominated by Naira is made an issue as a justification for tariff hike. The most ridiculous are the technical and commercial losses. Just like many so-called regulatory agencies under capitalism, NERC is not just a lame duck, it is conniving with the power companies to exploit electricity consumers. For instance, NERC collects at least 1.5% share of market revenue from the DISCOs as regulatory charges and it is in NERC’s interest to some degrees to have electricity tariff hiked.

The current tariff rates are so high and the only way the DISCOs have been able to manoeuvre is to introduce an apartheid-styled tariff policy wherein electricity is supplied to different communities based on class segregation. Currently, different communities have been classified into different band classes and many rural and poor communities are thrown into darkness for the most part of the day because of their low purchasing power. To add insult to injury, residents of these poor communities are usually subjected to estimated outrageous billing methodology. For instance, Ikeja Electric has classes Band A, B, C, D and E; Band A and B sometimes get a supply of electricity of about 20 hours and 15 hours daily, Band C and D and E are condemned to averagely 5 hours daily and sometimes condemned to outright darkness for days. There is the urban class that pays a high rate that is more than the approved rate. These supply hours attributed to Band A and B are not usually sustainable as electricity collapse every now and then due to a number of factors such as grid/system collapse, load-shedding etc. For instance, Ikeja Electric enters into agreements with highbrow areas dominated by the rich in what is called ‘Premium Package’ and electricity supply is at least 22 hours daily and they pay as much as N75 kwh. This apartheid policy is going on against the background of the fact that the power sector was built by public resources, but increasingly since privatisation it is largely the rich that benefits as the poor are condemned mostly to darkness.

So, privatisation since 2013 has brought with it an astronomical increase in electricity tariff without fundamental improvement in supply for the vast majority. Rather, to many consumers the experience has been super exploitation through the fraudulent estimated billing system through which they are made to pay for a service not used. Besides, the privatized companies survive on state support and bailout as since November 2013, over 2 trillion Naira has been invested on the power sector. Yet, 6 distribution companies (Port Harcourt, Yola, Ibadan, Kano, Kaduna and Benin DISCOs) have since failed due to massive mismanagement, corrupt practices and incompetence and it took another public/state intervention through the Central Bank of Nigeria (CBN) to get them running as going concern.

Access to electricity is a basic right just like every other basic infrastructure. Every human being deserves a good living standard to which the access to electricity is fundamental. But capitalism has succeeded in converting every basic need into a commodity priced out of the reach of many workers and the poor. We have always advocated affordable and uninterrupted electricity supply because it does not only improve living standards, it also improves productivity and lowers production costs.  The only way the electricity supply can be affordable and uninterrupted is to reverse privatization and place power sector under the democratic control and management of the working masses alongside the commanding heights of the economy.

Unfortunately, the leadership of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) have capitulated to accepting neo-liberal programmes, even the most rabid ones and thereby leaving workers and the poor vulnerable to attacks. However, it is good that the NLC has condemned the planned hike in electricity tariff but there is no indication of an action to resist. We call on workers and trade union activists to consistently put pressure on the labour leaders to act and take up their basic responsibility of constantly defending the interest of working class people including organising mass resistance against anti-poor policies like the electricity tariff hike. We also call on working people and youth to organise independently in different communities and workplaces to resist the hike, poor supply and exploitation by power companies. It is possible for such pockets of struggle to lead to a nationwide movement not only against electricity exploitation but also other capitalist attacks.