Senate: Why FG Should Subsidize Electricity For Nigerians

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* As Senate President Urges Discos To Get Consumers Metered

‘Discos Say FG Must Pay Differentials

By Kolawole Ojebisi

After succeeding in prevailing on the electricity distribution companies to shelve the hike in tariffs till the first quarter of 2021, the National Assembly, the Senate in particular, is going a step further by suggesting the idea of subsidy in the power sector to the federal government.

This the Senate believes will cushion the economic fallout of COVID ’19 and make electricity affordable to Nigerians.

The electricity distribution companies of Nigeria had on Monday told the National Assembly leadership that the only condition to halt tariff hike was for the Federal Government to bear the difference between the current tariff and the proposed one.Electricity

Addressing journalists on behalf of the red chamber on Tuesday, the Chairman, Senate Committee on Power, Senator Gabriel Suswam, and his counterpart in the Media and Public Affairs, Dr. Ajibola Basiru, said increasing the tariff at the moment would be counterproductive.

The upper chamber said the best thing for the Federal Government to do now was to take the challenge of subsiding power by paying DISCOs the balance of the current tariff and the proposed one.

Suswan specifically said there was nowhere in the world where such gestures were not being extended to the citizenry.

He said, “Nowhere in the world that power is not subsidised especially in a developing economy because there are genuine people, who, because of their income, are unable to pay what is called a cost-reflective tariff.

“Nigerians are heavily burdened because of COVID-19. The economy has contracted by 3.2%, that’s a lot.

“So it makes you and I to attend to some of our social problems. So, is the government preferring to add a burden or lessen it?
“The president has been doing well, he has spent so much money, and what we expect is that the spending will gradually reduce or diminish as the power sector becomes more efficient.

“There are two things, one is to make it more efficient and second, the government will back out just like they have done in the oil sector where subsidy has been completely removed.
“Even at that, the government is reducing the pump price. So, should they, in the same vein, increase tariff? It doesn’t make sense.
“I think the executive will agree, even though it’s going to come at a cost. But what cost is more than lessening the burden on the people?”

Meanwhile, the President of the Senate, Ahmad Lawal and the Speaker of the House of Representatives, Femi Gbajabiamila, on Tuesday visited the Presidential Villa, Abuja as part of efforts to resolve issues surrounding planned hike in tariffs in the country.

The two National Assembly leaders first met separately with President Muhammad Buhari on the issue before meeting again with Vice-President Yemi Osinbajo

At the end of the meeting with Osinbanjo, who also doubles as the head of Economic Sustainability Committee(ESC), they told journalists that the earlier plan by the distribution companies to hike tariff from July 1 was untimely.

The Senate President Ahmad Lawan also added that consumers should be properly metered before the increase in electricity tariff.

Recall that in January, the Nigerian Electricity Regulatory Commission (NERC) had announced that there would be an upward review of electricity tariff across the country from April 1.

However, in March, it directed DisCos to suspend the proposed tariff increase due to the COVID-19 pandemic. Sale Mamman, minister of power, later said the proposed hike will take effect from July 1.

Lawal said, “The joint leadership of the National Assembly sat yesterday (Monday) with DisCos and Nigerian Electricity Regulatory Commission ( NERC). We believe that this is not the right time to increase the tariff in the electricity sector. Nigerians have a lot of challenges today because of the COVID-19 pandemic and the situation requires that we do everything possible to make life easy for our citizens,” Lawan said.

“Of course, the government is doing a lot in this respect but we believe that DisCos should meet with consumers, find better cost-effective tariff. But before then, there must be some steps to ensure that the consumers are properly metered, otherwise, you will still go back to guessing what consumers are consuming. That is to say, that let the billing be scientifically based, it has to be based on what you actually consumed.

“So, we had this discussion with Mr. Vice President and we are sure that that announcement in the increase of electricity tariff in Nigeria is untimely. We believe that we need to do more work to ensure that before any increase, there must be some measures, steps, line of actions that must be exhausted including the metering. This is a welcome idea to the Vice-President as well.

“I believe that the share purchase agreement signed by the government and the DisCos at the point of the privatisation must be adhered to. These are businesses and they must do everything possible to provide services. It is when they provide efficient and effective services to consumers that they can make money.

“So, we cannot continue to give DisCos and GenCos the resources that we can ordinarily deploy to build hospitals. But whatever is necessary for us to do as part of our agreement with them, we must do those.”

According to NERC’s latest report, only 3.9 million of the registered 10.3 million subscribers in the country have prepaid meters.

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Hamilton Nwosa is an experienced, and committed communication, business, administrative, data and research specialist . His deep knowledge of the intersection between communication, business, data, and journalism are quite profound. His passion for professional excellence remains the guiding principle of his work, and in the course of his career spanning sectors such as administration, tourism, business management, communication and journalism, Hamilton has won key awards. He is a delightful writer, researcher and data analyst. He loves team-work, problem-solving, organizational management, communication strategy, and enjoys travelling. He can be reached at: hamilton_68@yahoo.com

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