Labour and private sector kick as Discos hike electricity tariff again

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The Nigeria Labour Congress (NLC), Trade Union Congress (TUC), and Organised Private Sector have criticised the recent increase in electricity tariffs for Band A customers.

Several distribution companies, including Ibadan Electricity Distribution Company, Eko Electricity Distribution Company, and Kaduna Electricity Distribution Company, announced that tariffs for Band A customers would rise from N206.80 per kilowatt-hour to N209.50/kWh.

The hike, implemented by the Nigerian Electricity Regulatory Commission, was attributed to the depreciation of the naira against the US dollar and inflation, among other factors.

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Despite the seemingly small increase, organised labour, private sector operators, and consumers voiced their opposition to the move.

They wondered why the power sector regulator would approve a tariff hike despite calls for the reversal of the previous tariff hike.

The National Vice President of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, said the move was going to cause an additional shutdown of industries.

“We do not need any further increase now. Any increase in inputs would translate to an increase in cost. We are already experiencing an increase in cost, which means we are facing an increase in the cost of manufacturing. This is unsustainable.

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“The constant increase in cost will lead to a decrease in demand for locally made goods, making them less competitive with imported goods from China. This will result in a decrease in profit, potentially leading to a shortage of industries. If industries are unable to sell their products, they may resort to reducing salaries or laying off workers, which could lead to an increase in crime.

“With inflation at over 30 per cent and interest on bank loans at a high per cent, we should be exploring ways to subsidise locally made goods to make them more competitive. Instead, we are increasing costs, making it harder for industries to survive. This is frustrating, especially when we see other countries like the Republic offering power at a lower cost.”

Kuti-George said the power sector should be unbundled to allow competition, similar to the telecoms sector, to drive down cost and improve service quality.

He added, “The issue boils down to monopoly. If we unbundle the power sector and allow anyone to generate and sell power, we won’t be having this conversation. We’ve seen the impact of competition in the telecoms sector, where SIM cards have gone from N56,000 to being free. We need to apply the same principle to the power sector to make it more competitive.”

The National President, Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said the increase in electricity tariff would negatively affect the private sector.

He said, “Many organisations are already struggling to stay afloat, and this hike will push them over the edge. Universities are warning of impending bankruptcy, and businesses will be forced to close shop.

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“This will lead to higher inflation as companies pass on the increased costs to consumers, resulting in higher prices for goods and commodities. Businesses that can’t absorb the costs will shut down, leading to job losses and a decline in economic activity. This will have a ripple effect on the entire economy, reducing government tax revenues and exacerbating social issues.

“We urge the government to reconsider this decision, as it will only serve to stifle the economy and worsen inflation. We need policies that support economic growth, not those that strangle it. The private sector is already struggling, and this increase will be the final nail in the coffin for many businesses.”

The Director-General, Lagos Chamber Of Commerce and Industry, Dr Chinyere Almona, had earlier called for a reduction in inflation and rate hikes.

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She said, “As inflation continues to rise despite the various interventions by monetary and fiscal authorities, we must take more decisive and multifaceted action to stabilise prices and support our citizens’ purchasing power.

“With several hikes in the past months, we are yet to record a significant impact on stabilising prices. The twin burden of high inflation and interest rates is overheating the economy and causing increased volatility and uncertainty.

“The private sector is once again thrown into more profound loan repayment crises as interest rates adjust to the new monetary policy rates. We are likely to see a reduction in demand as purchasing power weakens and this may lead to lower industrial production and loss of jobs eventually.”

Also commenting on the issue, the Secretary-General, National Union of Electricity Employees, Ogochukwu Igwebike, said workers in the power sector would resist the latest tariff hike.

“That decision to increase tariff is not okay. The NLC and TUC had kicked against the initial hike and we also joined in opposing it. But to our surprise they raised it again despite the concerns on ground.

“We are going to respond to that and we are saying no to it. We don’t accept it and it shall be resisted by workers, because the current economic realities do not support any such increase,” he stated.

faulted the move by the Discos without due consultations with members of the civil society and the Organised Labour.

The Deputy Head of the NLC political commission, Prof. Theophilus Ndubuaku, made this known in an interview with The PUNCH in Abuja.

“The truth about it is that on the issue of electricity tariff hike,  consultations must be made with the civil society and organised labour. Why are they not concerned about legality? It shows you that they don’t care, they just do what they want to do, they want to intimidate people. They do not seem to care at all. Instead of even telling Nigerians, appease us, they are telling us to switch off our fridge.

“We are also watching to see what they come up with as regards the minimum wage. We also want to know what the reaction of the populace will be.”

On his part, the Chairman of Trade Union Congress in Ekiti State, Sola Adigun, said the increase in power tariff was unacceptable to workers in the state.

“Speaking as the representative of workers under the auspices of TUC and as a citizen of this country resident in Ekiti State, that tariff hike is unacceptable. With all sincerity, it is inhuman.

“Every citizen of this country is crying and even the government had said on several occasion stated that it knows the hardship of Nigerians, but there are some steps and policies the present administration is taking that are totally not in alignment with their pronouncements.

“With our challenge here in Ekiti, I don’t know whether we even have Band A or B or C because as I am speaking now, the last time we experienced public electricity in my area in Ado Ekiti was in July 2023. In the next few days, it will be a year. You can see that majority of Nigerians and Ekiti people have been on alternative power supply source either generator or solar power.

“So, for whosoever to increase the electricity tariff, it is not acceptable because the power is not being supplied. We are expecting to hear from the national secretariats of the TUC and NLC. However, in Ekiti State here, it is unacceptable.”

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