Nigerian Employers Seek Reversal of Electricity Tariff Hike Amid Economic Concerns
- NECA has called on NERC and Nigerian DisCos to consider a reversal of the recent rise in electricity tariffs in the country
- The business association highlighted that the recent hike will adversely impact household costs and businesses will suffer
- It also urged the government to tackle the issues of food and general inflation that have ravaged the purchasing power of Nigerians
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.
The Nigeria Employers Consultative Association (NECA) has expressed concern over the rise in electricity tariffs. The association said the move negatively impacts businesses and the general public and should be reconsidered.
It would be recalled that the Nigerian Electricity Regulatory Commission (NERC) authorised a new electricity tariff for the 11 Electricity Distribution Companies (DisCos) in the country, effective from April.
Source: UGC
NECA warns of tariff hike implications
NECA's director general, Adewale Smatt-Oyerinde, explained in an interview that the tariff hike has resulted in higher costs for goods and services,
According to Daily Independent, he said that the hike effectively negates the benefits of any new minimum wage increase for workers, as it provides relief with one hand and takes it away with the other.
Oyerinde, however, urged the federal government to tackle the issues of food inflation and transportation and also explore ways to provide relief for the populace.
Tariff hike overdue - DisCos
Nigerian electricity distribution companies (DisCos) earlier stated that the hike was overdue, as the previous review occurred in 2015.
NERC stated that customers under the Band A feeders, benefiting from a daily provision of 20 hours of electricity, will now be subjected to a tariff of N225 per kilowatt (kW), effective from April 3, marking a significant increase from the previous rate of N66.
NERC clarified that customers in the remaining Bands (B -E) would not be affected by the review, but according to reports, that has not been the case.
Strained cost on household, businesses
Reacting to the issue, Wale Ogundeji, an energy analyst, told Legit.ng that Nigeria's recent electricity tariff hike significantly impacts households and businesses.
He said:
"For households, increased costs strain already tight budgets, potentially leading to reduced disposable income and lower quality of life.
"Businesses face higher operational costs, which could result in increased prices for goods and services, potentially stifling economic growth and competitiveness.
"Small and medium enterprises (SMEs) are particularly vulnerable, as they may struggle to absorb the additional costs."
He added that the tariff hike could make electricity less accessible to low-income families, thereby hindering inclusive economic development and social equity efforts.
NERC issues fresh instructions to DisCos
Meanwhile, Legit.ng previously reported that NERC sent a directive to DisCos regarding the execution of the April 2024 Multi-Year Tariff Order.
In a statement issued on Saturday, NERC emphasised that the commission had instructed all DisCos to offer maximum clarity to all impacted customers.
It highlighted that all DisCos must promptly publish the schedule of approved Band A feeders affected by the rate review on their websites.
Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
