Why I would support 50% increase in electricity tariff in Nigeria

Editor’s note: The increase in electricity tariffs was met harshly by Nigerians. Reacting to the wave of protests and overall discontent for demanding higher pay for lack of power, the 8th Senate has directed the NERC to suspend the February 1st, 2016 tariff hikes immediately. Ebuka Onyekwelu, the Legit.ng author, says the regulatory bodies are free to increase the tariffs by 50% — once they start providing adequate services worth the pay.

No modern civilization can be imagined without a constant power supply. The fact remains that modern societal progress is generally, not merely economically, hinged upon the availability of a steady power supply.

Of course, there is the inseparable union between economics and politics, such that, by and large, a country with a good economy that reflects on the lives of the citizens usually has a different kind of politics that tends to be more people-oriented and participatory. Part of the reason for this was theorized by Maslow in his hierarchy of needs. Being that man’s need is basically economical, it follows that the economic needs of a man take preeminence, and when those needs are reasonably met, other needs become worth giving a thought.

Nigeria vs word standards

It does not therefore come as a surprise that a country like Ghana with relatively steady power supply, compared to Nigeria, is thriving economically as well as politically. Companies and industries have been reported severally to be cold-shouldering Nigeria for Ghana, though Nigeria has the market and the man power! But what Nigeria offers is not enough for running a good business, which is conceivably bad for entrepreneurs, particularly industrialists.

In 2008, I visited Emzor Pharmaceutical company located in Isolo, Lagos state. Just in that week, the company had spent millions of naira on diesel running their mighty generators. The company has employees who they pay monthly. They pay taxes, perform other social responsibilities and still provide for the basic infrastructure which is customarily the exclusive preserve of the government. Yet, somehow, a case of their analgesic is at N20!

The questions

Two questions come to mind. Is it not possible that the case of their analgesic could actually be sold at N2 or less if there was constant power supply? Certainly it could. Secondly, who pays the excesses that ensure Nigerian local producers remain in the market? Definitely the people.

It is always the people that bear the consequences of infrastructure deprivation by paying higher for locally produced goods that they should otherwise pay less for. The people also pay by going unemployed when the local producers abdicate there operation in Nigeria.

The issue of quality of the product also has so much to do with production costs, heightened astronomically by towering costs of running and maintaining generators. You see, producing high-quality goods does not make business sense because ultimately, not many people can afford the goods. This partly explains why Nigerian goods are usually of low quality. Therefore it is important that, more than anything else, Nigerians should demand for steady power supply.

Delivering less and still demanding more pay?

Now let us return to the issue at hand. The proposed increase in tariff by 45%: upon which reason or logic did the PHCN, the national power regulatory body, arrive at such? My thinking is that the PHCN should have increased the tariff by 50% if they borrowed money or entered an agreement under a private public arrangement to effect notable impact which has resulted in constant power supply. Instead, for about one week now, I have not seen even a flicker of public power, this is the constant experience of Nigerians and our entrepreneurs; accordingly upon which logic should Nigerians pay more for services not rendered?

It will thus appear that there is indeed no basis for any increase in tariff.

Another important concern of that tenuous idea to increase tariff bothers on billing. Will the billing be limited to people using electronic meters? If not, why are the electronic meters no longer supplied or fixed for consumers? Considering that the manual meter permits non-transparent billing to the detriment of the consumers, why didn’t the PHCN start the reforms with ensuring that electronic meters are installed throughout Nigeria?

Fair play first

This is how an honest reform in the energy sector should start. Else, it will be plausible that the supposition so readily advanced, as is deducible through the posture of our institutions, that Nigerians should pay for services they were not offered so that presumably, Nigerians can avail themselves of the opportunity to have better service delivered to them, is just to say the least dippy.

Since the PHCN is going commercialized, why not deliver the service first and then demand a 50% increase? Sometimes one wonders where this idea of endless exploitation of the masses in the name of reforms comes from.

Would it not benefit the PHCN if it delivered automated meters to all users and then ensured steady power supply, increased tariff and made serious profit off Nigerian energy wasters who never switch off their energy-demanding light bulbs and other electrical appliances. This is the most rational line of action one would expect of the PHCN: a path of innovations and reforms that deliver results.

We want results, not this typical lackluster and barren pattern of "pay more in the hope to get more" with no guarantees. The essence of this kind of evidential transformation prides as the crux of Nigeria’s developmental needs. As advanced here is basically a reform that will drive Nigeria to a surge of self-propelled multifaceted development of economic, political and social climes. Nigerians should set the pace for this deliberation and proposed reform. The people should demand constant power supply and in return get 50% increase in tariff.

Ebuka Onyekwelu is a political scientist, a public affairs analyst and activist with concerted interest in Africa’s crisis of development and leadership. Follow him on Twitter @ebukaequity.

This article expresses the author’s opinion only. The views and opinions expressed here do not necessarily represent those of Legit.ng or its editors.

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Source: Legit.ng