Nigeria’s private sector has called on the federal government to show transparency in the implementation of new electricity tariffs, providing conditions.
The conditions were contained in an agreement reached on September 4 after the Organised Private Sector of Nigeria’s leadership met the government represented by the Special Adviser to the President on Infrastructure, Ahmad Rufai Zakari.
It agreed with the government that the subsidy regime was unsustainable and should be discontinued.
The September increase of electricity tariffs was the key point of the discussion.
The OPSN said, “The electricity industry will collapse as the government no longer has the fiscal capacity to sustain the increasing subsidy level and at the same time finance the capital investment necessary to extend electricity supply to the over 90m Nigerians who lack access to electricity.”
It, however, spoke of the importance of creating conditions attractive to private investment in the Nigerian Electricity Supply Industry for which cost-reflective tariff is inevitable.
It explained, “It is, however, imperative that the confidence of electricity consumers must be inspired and they must be assured that the new tariff regime will lead to significant and sustained improvement in the quantity and quality of electricity supply.
“The new tariff structure must be transparent, charges must be fair and consumers must be able to verify that they are paying only for what they consume.”
The OPSN comprises the Nigerian Association of Chambers of Commerce Industry Mines and Agriculture, Manufacturers Association of Nigeria, Nigeria Employers’ Consultative Association, Nigerian Association of Small and Medium Scale Enterprises, and Nigerian Association of Small Scale Industrialists.
At the meeting, the OPSN called on the government to justify the new tariff increase while many businesses are trying to recover from the adverse effects of the COVID-19 pandemic and fall in oil prices.
Responding Zakari said the financial quagmire the government is facing made it impossible for it to continue to fund the NESI without any positive improvement in the supply of electricity to consumers.
According to him, over the past five years, subsidy on electricity increased from N165bn in 2015 to over 500bn in 2019, more than the budgetary allocations for health and education combined.
