A Review of the Nigerian Energy Industry

Bracing up for tariff increase

23 June 2015, Lagos – It has been a pleasant week of nonstop electricity supply. I cannot remember when I last enjoyed uninterrupted power supply for two straight days. Suddenly, the supply has kept coming for one straight week and it has not stopped. I remember the days I use to go to bed with a book in my hands and wake up to find the book on my chest, with the lights still on. How I crave for those good old days.

Power transmission station
Power transmission station

The steady power supply of the past week got me thinking again; so we can actually enjoy uninterrupted power if we set out to do so, the sufferings of the past years were as a result of the consequences of man’s actions and inactions. Was there sabotage?

That one is another topic for debate but let us just be happy that the days of steady power supply are gradually coming back and we look forward to it with hope.

It did not take one week for our euphoria to be punctuated, it came in the form of a news item credited to Premium Times but posted on the allafrica.com website of 13th June 2015; “The Eko Distribution Company on Saturday urged electricity consumers to brace up for upward adjustment in tariffs to partly meet the reality of the prevailing economic situation.

Oladele Amoda, EKEDC Chief executive officer, made the plea in Lagos at a stakeholder’s consultative forum with the customers on the need to adjust electricity tariffs”. So that is why the power has been relatively steady. In the past, electricity supply is distributed a day before the bills are to be distributed and turned off a day after; you have to wait for another month to have electricity power again.

Because the increase will affect everyone and with the expected reactions from angry consumers, they have decided on a pacifist approach, hence our experience of the past week. If the action is the beginning of the much anticipated change, it is welcomed and we expect it to continue because success is not a one off thing.

As we celebrate the DISCOS performance – yes, it is worthy of celebration, regular supply of power for one week, not in Ikoyi, Lekki or Victoria Lsland but also, in the outskirts border towns of Lagos – we advise that they slow down on the increase tariffs bit. In the finance world, there is what is called moratorium, this means enjoying a service or facility for a period of time without additional charges, taxes, duties or penalty imposed. The people deserve a moratorium; they have suffered for too long.

The impact of power on the nation and its citizens cannot be over emphasised , businesses are grounded leading to unemployment, which leads to crime and hooliganism amongst our youths and climaxing in a failed state situation as it happened in the states of Borno and others in north eastern Nigeria. Even husbands and wives are getting separated because of the inability to generate light to consummate relationships.

Power is invaluable. I took the painful decision two weeks ago to lock up a production outfit that I have ran for fifteen years because of the inability to manage the power situation, cost of running the generator has gone far higher than staff salaries and raw materials combined. Who would have factored this situation in a feasibility report.

It is clearer to me now why companies like Michelin, Dunlop shut down their factories and why our textile factories are in comatose and the likes of Cadbury and Unilever are struggling. It is a very serious matter. Without regular power, no country can develop in all ramifications because it is power that drives technology – without power you cannot carry out research, you cannot produce and transportation is near impossible.

Since the early eighties, we experienced the shutdown of the Peugeot and Volkswagon assembly plants, power has been in limbo in this country. You can understand now, why this past week experience has been exhilarating but like I mentioned earlier, we must be gradual in the approach to the tariff increase because the people have been battered for so long and are barely surviving instead of living.

We need power to put majority of the people back to work and when they are effectively back to productive activities, they will be better placed to cope with the increased tariff regime. There are companies who have not been able to pay staff salaries in the past five months, even governments are finding it difficult to cope like the state of Osun. If the people have not received their salaries for as long as five months, where will they get money to pay for electricity?

The government had been magnanimous to these electricity companies in the past through various waivers and grants under previous administrations; it is now time for them to reciprocate same gesture. I am not saying that tariffs shouldn’t be increased – at least they have to buy equipments and pay workers salaries – but they should give reasonable time for people to get adjusted to it.

History has shown that the people are willing to manage and bear inconveniences when the activities of the government are sincere, like it happened with taxes in Lagos and the setback structures that were destroyed for road development purposes across the city of Lagos. The proposed tariff increase should wait till the end of the year to allow people get adjusted to regular power supply, please.


– Sunny Ikhioya, Vanguard

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