That electricity subsidy removal roadmap


By Grace Anderson

This is about the second time subsidy is being removed from a very critical sector of the nation’s economy under President Bola Tinubu’s era. The very first subsidy removal was during his inauguration less than a year ago. There and then, he announced the removal of oil subsidy. Nigerians groaned and lamented. It was too sudden and the effect has been devastating. The Nigerian Labour Congress (NLC) embarked on a nationwide strike in protest against the removal and got slammed with a court order. The NLC had no other option than to retreat. Till today, nothing tangible has been done to cushion the effect of the oil subsidy removal; from N145 to a whopping N600 and above. Yet, nothing has been done about the salaries of workers. The upward review of their salaries is still work-in-progress months after subsidy on oil was removed.

While we’re still trying to survive the drowning effect of subsidy removal on oil suddenly, Chief Adebayo Adelabu, Power Minister came up with his own contribution which he described as a roadmap. Hear him: “We are in a difficult situation in the country today. A lot of people are passing through hardships resulting from the high inflation of almost 30% resulting from the devaluation of naira, resulting from the petroleum subsidy removal. There are hardships and everybody feels it so, it is not the time that anybody will call for a total removal of electricity subsidy. No, it will sound highly insensitive to the feelings of our people. So what we intend to have in the policy is the roadmap. Probably two to three years road map that will migrate us into a cost reflective tariff which means that government’s subsidy will remain till the end. We will keep reducing it from time to time.”

That is the much talked about road map and Nigerians are already used to the undertones because we know that inevitably, they want to subtly choke us with series of price increments trying to confuse us with grammar. They should have saved themselves the stress of a series of press briefings by just telling us in clear terms that they want to increase their prices because that’s their aim. Then to match action with words, the minister announced a hike in electricity tariff for “Band A” customers. Hear him again: “this week’s hike in Electricity Tariff for Band A customers was informed by the realization that spending almost 10 percent of the nation’s national budget on subsidizing electricity alone was unsustainable. The subsidy has already cost government N2.9 trillion this year alone.”

So, the implementation was hurriedly done, and the minister’s mien gave the impression that he was sympathetic to the cause of the poor and downtrodden in the society. So, electricity distribution companies went to work to effect the increment for “Band A” customers, some became overzealous and did not only stop at Band A, but across other bands as well. One of such companies is the Abuja Electricity Distribution Company (AEDC) which went ahead to apply the new tariff to Bands B, C, D and E. Then the Nigerian Electricity Regulatory Commission (NERC) received feedback from customers and did a detailed review, indicted AEDC was and asked her to reimburse the affected customers by April 11, 2024.

We are still watching to see if they will comply. Some victory for Abuja customers but is NERC aware that other electricity distribution companies have been disregarding their rules? One of such is the one on repair and replacement of transformers. What is presently obtainable is that if a community by omission or commission loses her transformer due to vandalism or complete breakdown, the electricity distribution companies distance themselves from such communities. In so doing, some communities stay for months and even years without light, and when they get tired, they contribute money to fix the transformers. Immediately this done, the concerned electricity distribution company comes back to continue from where they stopped. Probably, NERC is not aware of this particular development and needs to introduce strict monitoring so that the consumers don’t keep getting exploited.

The Minister of Power continued: “Electricity is no longer cheap for Band A but this policy is pro-poor. The high-end people are the ones that are enjoying the subsidy more than others because they consume more. This is because what they are enjoying is more than what the poor is enjoying. We are saying no, let them pay the right price and let the poor breathe too.” But, are the poor breathing? We have to tell ourselves the truth while answering that question. In this same country, some people have electricity supply up to 20 hours a day while others don’t see or use it at all. Yet, they are paying and having arrears running to hundreds of thousands of Naira. Isn’t that a form of social stratification? The poor do not fall under any band at all because they are mostly unmetred customers. Now, can we still say that the policy is pro-poor? No! Majority of the poor do not have access to the prepaid metres; therefore they fall under estimated billing where electricity distribution companies sit behind computers to manipulate figures and send to them. They are forced to pay for what they do not use.

To put it in proper perspective, even with this roadmap, the poor are almost choking to death because the electricity distribution companies have been given the license to increase the bills at will, whether or not they have supplied electricity to consumers. What the minister should have done for the poor if he was truly pro-poor, would have been to help them fall under any of the bands by ensuring that the poor have access to the prepaid metres so that the burden of estimated billing does not choke them up. Otherwise, it’s like there is a conspiracy against the poor already in the power sector. That’s the simple reason why some areas have a reasonable power supply while some don’t have at all, yet, the bill does not fail to get to the domains of those who don’t have supplies.

We already know the beginning from the end as far as electricity subsidy removal is concerned. It is a calculated attempt to further impoverish the poor by making access to electricity beyond their reach. In all, there is still hope for the poor man as the same sun that shines on the high and mighty also shines on the poor man. What if God allowed man to control the sun? That means that the poorest of the poor would have paid through their noses to buy a fraction of it to dry their clothes. Surely by now, they would have removed subsidy from the sun too. Thankfully, God’s ways are not man’s ways. So, what next are they removing subsidy on? I won’t be surprised if they come up tomorrow to say they are removing subsidy from tax. You know in Nigeria, almost anything is possible.