Democratic Socialist Movement

For Struggle, Solidarity and Socialism in Nigeria

By - DSM



The Bola Tinubu government through the Nigerian Electricity Regulatory Commission (NERC) has imposed another provocative hike in electricity tariff for Band A consumers by a whopping 230% – from N68 Kwh to N225 Kwh. According to NERC, this tariff hike affects about 15% of the total consumers and is targeted at the so-called rich people. The reality is that there is hardly any community which is exclusively for the rich. These communities have many workers, pensioners and urban poor people who are residents or shop owners and will be affected adversely.

Besides, this tariff which affects many big companies will translate into higher cost of production or business and be passed on to workers and the poor as higher prices of goods and services. As a result, the current cost of living crises will be further aggravated, potentially throwing more working people into poverty. Already, inflation is high at 31.7 percent and  prices have gone through the roof as a result of petrol subsidy removal and devaluation of the Naira by the Tinubu government. The Coalition for Affordable and Regular Electricity (CARE) condemns this tariff hike and demands its reversal. We also  call on working people and youth to reject it.

Electricity for industries and many businesses in Nigeria reportedly constitutes 40% or more of the total cost compared to 10% in China for instance. The huge cost of doing business is one major reason many companies closed down or relocated abroad contributing to job losses and a high unemployment rate.

Hence, it is not true that the outrageous tariff hike for Band A will exclusively affect the rich and middle class, it will also affect workers and the poor. This anti-poor Tinubu-led government is all out to protect the profit and greed of a few while it cares less about Nigerian workers and the poor.

Besides, the agenda is also to create an apartheid-styled electricity distribution system entrenched in massive exploitation. This means communities dominated by the middle class and the rich get 20 hours or more electricity daily while communities dominated by ordinary workers and the poor get little or no electricity daily. In this type of unfair, discriminative electricity supply, Band A which constitutes about 15% may get about 50% or more of the electricity supply while the other consumers, totalling 85%, may get less than 50% of electricity. The power sector was built and funded by the collective wealth of  the country including the taxes of Nigerian workers and the poor. Therefore, we must reject a case of robbing Peter (workers/poor) to pay Paul (the rich). Every Nigerian deserves equal, affordable and uninterrupted power supply irrespective of social status. The government can tax the rich progressively more than the workers but social amenities like education, healthcare, electricity etc., must be distributed equally to all.

The outrageous tariff hike for Band A is coming after some months NERC increased tariffs for some other Bands. Customers in Abuja are now forced to pay N63.24/kWh; some customers in the states covered by Enugu Electricity Distribution Plc (EEDC) will pay N59/kWh; the tariff for some customers within Ikeja Electric coverage will pay N56.60/kWh; some customers with Benin Electricity Distribution will pay N60.10/kWh. Across the 11 Distribution Companies, the increment ranges from N55/kWh to N63/kWh, which is an average of N60/kWh and represents an average of 20%.

On January 17, 2024, NERC’s chairman Sanusi Garba stated publicly that the federal government is still paying subsidies on electricity consumption despite the recent tariff hikes and that the federal government have agreed to pay N1.6 trillion as subsidies in 2024. According to him, the cost-reflective tariff for Ikeja Electric customers is N112.10/kWh for instance. In April 2024, the Minister of Power Adebayo Adelabu disclosed the resolve of the government to phase out the  subsidy within 3 years. The implication is that the outrageous tariff hike announced for Band A consumers is to test the waters and more hikes await consumers on other Bands until the so-called cost-reflective pricing is achieved. However, the drive for super profit means that power companies, in connivance with the capitalist government, will continuously increase electricity tariffs after phasing out the so-called subsidy.

However, it is clear there is manipulation of the subsidy figures and Nigerian working masses should not believe the outrageous figures being brandished. NERC’s chairman said the subsidy for 2024 is N1.6 trillion while the Minister of Power put  it at N2.9 trillion. The fact is that any subsidy declared by the private power companies, NERC and the Ministry of Power is not reliable. Just like the petrol subsidy, the ‘electricity subsidy’ is characterized by corruption, jumbo salaries and allowances for top executives, wastages, high cost of gas etc. Besides, one of NERC’s reasons for incessant tariff hikes since 2016 is the high exchange rate of Naira to the dollar. Yet, the same government continuously devalues the Naira and at the same time fraudulently uses it to justify the hike in electricity tariff and petrol price. This is indicative of an insensitive government whose preoccupation is to constantly attack living standards. In the same vein, gas for power generation is produced in Nigeria but it is dollarized and expensive. Nigerian working people must reject and resist being forced to pay international market prices on products (gas, petroleum products etc.) and services that Nigeria has comparative advantages over.

What the power sector has been known for since the privatization in 2013 is incessant tariff hikes and widespread darkness. Electricity system collapses have become frequent; between January 2024 and March 2024, the national grid has collapsed 5 times, throwing the entire county into darkness. In September 2023 alone, 3 grid collapses were recorded within 5 days. On December 12, 2023, the national grid collapsed from 4,000MW to 43MW. This is an indication of the failure of the privatization programme. In 10 years and 5 months, there have been 9 electricity tariff hikes and the tariff increased by at least 350 percent . For Band A consumers, the tariff has been increased by over 1,700% while the income of the masses has fallen due to rising inflation. Despite privatization, the government has lavished over 2 trillion Naira bailing out private power companies out of which 5 distribution companies have failed already, necessitating a government takeover.

Before privatization, the self-serving capitalist ruling elite presented privatization as the magic wand but it is now very clear that the whole privatization programme is an agenda to make a set of privileged super-rich individuals at the expense of the vast majority of Nigerians. Since privatization, generation, transmission and distribution of electricity is at an average of 3800MW out of the installed capacity of about 13,000MW which was inherited. In other words, the private power companies have not only failed to expand the capacity, they operate well below it. Yet, about 80 million Nigerians, mostly from the rural areas, are yet to be connected to the national grid. This is a monumental failure for privatization and the Nigerian capitalist ruling elite.

Given the obvious failure of privatization, there is an urgent need to re-nationalise the power sector, bring it under public ownership and democratic control and management of the working masses. This is with the view of ensuring judicious use of massive public investment that will drive the cost of electricity down and make it affordable in the long run for most Nigerian consumers while electricity consumed by the poorest is subsidized.

The Coalition for Affordable and Regular Electricity (CARE) calls on the trade union leadership and pro-masses organisations to mobilise workers and community people for a struggle to resist both the current and planned electricity tariff hike. The struggle should also demand reversal of the tariff hike, reversal of privatization of the power sector, massive public investment and democratic control of the power sector by workers and consumers.

Chinedu Bosah

National Coordinator

Coalition for Affordable and Regular Electricity (CARE)

Email: [email protected]