COMMUNITY PEOPLE AND TRADE UNIONS MUST FIGHT FOR REGULAR AND AFFORDABLE ELECTRICITY
Outrageous Band A Tariff and Incessant Grid/System Collapse are a Product of Brutal Exploitation Aimed at Huge Profit at Consumers’ Expense
Between October 14 and 15, 2024, a period of less than 24 hours, the grid collapsed twice, the 8th collapse this year alone. The reason for this grid collapse is not far-fetched. The lack of required investment in the modernisation and upgrade of the power infrastructure leads to frequent system/grid collapses.
By Chinedu Bosah
A high degree of Nigeria’s transmission infrastructure was built in the 1970s and is currently obsolete and overstretched. This lack of investment cuts across the electricity supply chain (generation, transmission and distribution). The installed generation capacity in Nigeria is about 14,000MW but it generates 5,000MW on average because of high cost of gas, inadequate gas pipelines, poor transmission network and poor distribution network/facilities. This is aside from the fact that the installed capacity of 14,000MW is far below the required energy needs of the country, which is about 33,000MW. The target to incrementally increase generation, transmission and distribution to 8,000MW or more in the absence of major investment in the entire sector of the value chain will continue to trigger more grid/system collapse and distribution failures. There is an urgent need to invest massively to build more power plants, improve the gas supply infrastructure, build renewable power infrastructure based solar and wind, overhaul and upgrade the transmission capacity and infrastructure to put in place modern spinning reserve, voltage support mechanism, transformers, switchgear etc. In the area of distribution, there is a need to upgrade the power stations, feeders and distribution lines facilities.
There are no technological reasons why there is a power shortage. Rather than invest massively to expand the generating, transmission and distribution capacity, the government and private power companies are chasing huge profit through the imposition of outrageous electricity tariffs and bills on the people. To achieve this exploitative economic agenda, the government strive to force Nigerians to pay electricity bills/tariffs as is the case in the advanced economy whose purchasing power is far higher than in Nigeria. Imposition of about 234% (N68 to N227KWh) Band A tariff hike on many communities and consumers is condemnable. It is increasingly making electricity supply an exclusive preserve of the rich while many workers and the poor are denied electricity because they cannot afford it. The combination of failure and profiteering by the electricity companies damages every aspect of life and the economy. Besides, many consumers have been forced to pay more outrageously high bills through the criminal estimated billing methodology since the imposition of Band A tariff.
The electricity sector was built on public funds but supply currently is based on discriminated apartheid-styled supply on different Bands (A, B, C, D and E). Band A gets a minimum of 20 hours daily supply though it is not guaranteed, while Band B, C, D and E get an average of 15, 12, 10 and 7 hours respectively. Moreover, the government through the Minister of Power has said that all electricity consumers will be migrated to Band A on or before the end of 2027. In reality, if the government and power companies succeed in imposing Band A tariff on all consumers and communities, the practicability is that electricity supply may drop to less than 10 hours while the tariff remains so high unless there is massive investment in the sector, a feat the power companies cannot undertake. The power companies and government hope to crash the general consumption to 8,000MW or below through the very high tariff. Just recently, the Ikeja Electric Akowonjo Business Manager (Mr Abayomi Gabriel Bolorunde) stated that the load on some transformers have drastically reduced from 90% to 35% after they were put on Band A, this implies that electricity consumption has been suppressed by 55% through the implementation of outrageous Band tariff. This is possible because the Band A tariff has forced most people to reduce electricity consumption by switching off gadgets when needed to survive the provocatively high electricity tariff. It remains to be seen how the power companies will bring all consumers under Band A and still maintain 20 hours minimum daily supply when the installed capacity is about 14,000MW as well as obsolete electricity infrastructure that frequently throws community into darkness.
The immediate basis for the high electricity tariff and billing are the IMF/World Bank inspired neo-liberal and anti-people policies that place pricing far above the average purchasing power of the people. It is their profit-led solution to electricity shortage, not a solution based on how to meet the needs of both individuals and society.
The subsidy claim of the government is built on gas being sold at international market rate of $2.42MMBTU, and electricity tariff increasingly being benchmarked on the exchange rate to dollar and it is for this reason, the subsidy will be maintained as a justification for tariff hikes and sustain huge profit for the industry players and top public office holders. The plan is to achieve more profit but with little or no investments. Most of the power plants in Nigeria were built before privatization in 2013, most workers are paid poverty wage and in Naira, transmission and distribution infrastructure were built decades ago, what is now the justification for subjecting electricity pricing to exchange rate as if it is being imported?
This can only make sense under President Tinubu’s government and the capitalist system. Since the privatization of the power sector in November 2013, power companies in connivance with NERC and the Ministry of Power have steadily increased tariffs from N12.45/KWh to N227 (for Band A consumers), a total of over 1723.29% increment within 11 years while the minimum wage increment within this period is 289%. It is obvious that the only agenda of the private electricity companies and the capitalist ruling elite is profit and they care less about consumers’ affordability and stable power supply. Besides, the distribution companies have failed to issue prepaid meters to all consumers, leaving many consumers more vulnerable to fraudulent, outrageous estimated billing and high cost of prepaid meters.
Given the obvious failure of privatization and the private electricity companies, there is an urgent need to re-nationalise the power sector, bring it under public ownership and subject it to democratic control and management of workers and consumers with the view to ushering in massive public investment that will drive the cost of electricity down and make it affordable to Nigerian consumers while electricity consumed by the poorest is subsidized.
Electricity consumers in different communities and the trade unions (Nigeria Labour Congress and the Trade Union Congress) must organize resistance both individually and jointly in a series of nationwide actions on a sustained basis against these outrageous tariffs to win the demand for affordable and regular electricity.