Nigerian Business Owners And CSOs Oppose Proposed Electricity Tariff Increase

Small Business Owners and NGOs Reject Proposed Tariff Hike

Lagos — Small business owners and civil society organizations (CSOs) have strongly opposed the Federal Government’s proposed electricity tariff increase. The planned hike, which targets customers outside the Band-A category, is intended to improve the liquidity of the Nigerian Electricity Supply Industry (NESI). However, critics argue that there is no justification for such an increase, especially given the country’s ongoing power supply challenges.

Government’s Justification for the Electricity Tariff Review

During the public presentation of the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan (NIRP) in Abuja, the Minister of Power, Chief Adebayo Adelabu, revealed that the government can no longer sustain the N3 trillion power sector subsidy. He highlighted that debts owed to power generation companies (GenCos) have soared to N4 trillion, making the financial burden unsustainable.

Key Points from Minister Adelabu’s Statement:

The sector faces severe liquidity issues.
A tariff review is necessary to ensure continuous investment in power infrastructure.
Band-B customers currently receive around 18 hours of electricity and pay N63/kW, creating a gap between them and Band-A customers.
The government aims to phase out delayed electrification and self-generation by 2035, requiring an estimated $29.23 billion investment.
Total power sector investments could reach $122 billion by 2045.

The Impact on Small Businesses and the Economy

The Association of Small Business Owners of Nigeria (ASBON) has expressed concerns that any further increase in electricity tariffs would cripple many small and medium enterprises (SMEs).

According to ASBON President, Dr. Femi Egbesola:

Most SMEs rely on government-supplied electricity.
Increased tariffs will raise production costs, leading to inflation and low sales.
Many micro and small businesses may shut down due to unsustainable electricity bills.

Civil Society Groups Resist the Tariff Increase

The Education Rights Campaign (ERC) and other advocacy groups have vowed to resist any proposed electricity tariff hike.

ERC’s National Coordinator, Hassan Taiwo, stated:

Power supply remains unreliable, with frequent outages.
The national power grid has collapsed multiple times in the past year.
Increased electricity costs would exacerbate financial burdens on citizens.
Even government institutions like UCH Ibadan struggle to afford electricity bills, leaving patients in distress.

The Movement for Socialite Alternative (MSA) also rejected the proposed hike, arguing that electricity privatization has only benefited profiteers while neglecting investments in power generation.

MSA’s General Secretary, Dagga Tolar, pointed out:

The Band-A tariff hike was a test-run to divide consumers.
Private investors profit without increasing electricity supply.
Electricity workers face poor working conditions and low wages.
The government must re-nationalize the power sector under public ownership.

NERC Introduces Consumer Protection Measures

To address concerns over unfair pricing and service delivery, the Nigerian Electricity Regulatory Commission (NERC) has introduced a Customer Bill of Rights and Obligations.

According to NERC Senior Manager, Mr. Pious Bakom:

Customers have the right to clear information on rates and service terms.
Consumers must fulfill obligations such as timely bill payments and allowing access for meter installations.
The Customer Protection Regulations (CPR 2023) align Nigerian electricity standards with global best practices.

NERC advises customers to notify their distribution companies (DisCos) when vacating premises to avoid liability for unpaid bills. The commission urges Nigerians to familiarize themselves with their rights to promote transparency and accountability in the power sector.

Conclusion

The proposed electricity tariff increase has sparked significant opposition from small business owners, civil society groups, and labor unions. With Nigeria still struggling with frequent power outages and high electricity costs, many argue that the government should focus on improving supply reliability rather than increasing tariffs.

As the debate continues, stakeholders will need to find a balance between ensuring sustainable electricity supply and protecting businesses and consumers from financial strain.