This comes as the Minister of Power, Adebayo Adelabu, revealed that the introduction of a new tariff for band A consumers has reduced the electricity subsidy to N1 trillion from N2.9 trillion.
This revelation came at a special public hearing on the increase in electricity tariffs organised by the House of Representatives Joint Committee on Power, Commerce, National Planning and Economic Development, and Delegated Legislation.
At the meeting, lawmakers also bemoaned the absence of the leadership of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC).
The Nigerian Electricity Regulatory Commission (NERC) had on April 3 raised the electricity tariff for customers enjoying 20 hours of power supply daily, prompting organised labour to stage a protest to reject the increase.
Following the outcry, the House of Representatives during a plenary session on April 30 resolved to set up a special committee to probe the increase.
This followed a motion of urgent public importance moved by Kama Nkem-Kanma (LP, Ebonyi State).
During Tuesday’s hearing, a member of the National Executive Committee of the Manufacturers Association of Nigeria (MAN), Ahmed Abdulkadir, lamented the huge loss suffered by manufacturers due to the tariff increase.
Abdulkadir disclosed that over 300 firms have shut down and over 300,000 jobs have been lost due to the over 200 per cent hike in electricity tariffs, urging the lawmakers to save the nation’s manufacturing sector.
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He also cautioned the minister of power against comparing Nigeria’s electricity tariff rate to neighbouring countries, saying, “Our purchasing power, exchange rate, and environment are not the same.”
Responding, the Managing Director of Jos DisCos, Abdu Bello Mohammed, said electricity is a business in Nigeria, noting that the sector had been privatised with the private sector acquiring about 60 per cent.
“We don’t operate as a charity, just as MAN members do not engage as a charity. We buy power from generators and we distribute it to our customers at cost.
“We have generation costs, transmission costs, and distribution costs. We can’t buy electricity at a certain cost and sell it to customers below that cost. So much has been talked about subsidy, but the power sector needs to move forward, and I believe we are setting a solid foundation. You will recall that the power sector has spent about 25 years spinning in one position without progress. This is the right time we make decisions to ensure that we go forward,” he stated.
The minister, while insisting that the government cannot continue subsidising electricity, said the amount consumers spend on electricity is now cheaper compared to fuel and diesel, even with the increase in electricity tariffs.
“We are still about the cheapest, even in sub-Saharan Africa, despite the tariff. Our neighbouring countries pay higher. So the price isn’t comparable.
“Band A is cheaper compared to other sources of generating power. It is almost 50 per cent cheaper to connect to band A of the national grid than to run on fuel and diesel.
“So when we complain about the higher tariff, it is cheaper for any business to pay for a grid connection than to individually generate power,” he said.
The minister said the current band A tariff is not among the top 10 most expensive tariffs in sub-Saharan Africa.
Speaking, Chairman of NERC, Engr Sanusi Garba, said the tariff was introduced after the commission undertook a detailed assessment of the tariff proposals submitted by the 11 Electricity Distribution Companies (DisCos). He added that public hearings were organised on the submissions by DisCos in the six geopolitical zones.
He, however, blamed the increase in tariff on the volatile exchange rate and the removal of the fuel subsidy by President Bola Tinubu.
Before the commencement of the hearing, lawmakers took turns to berate labour leaders who they said were duly invited but refused to show up.
The lawmakers said the labour unions cited the ongoing annual conference of the International Labour Organisation (ILO) taking place in Geneva, Switzerland, as the reason for their absence.
A lawmaker, Olufemi Bamishele (APC, Ekiti) expressed concern that organised labour was more interested in travelling to Geneva when there were issues of urgent national importance.
“This Gestapo approach to address matters cannot help Nigerians. This is a platform for all stakeholders to present their sides so that justice can be done. We are talking about estimated billing, non-metering, and here the unions are absent. This is very sad. They did not also submit their memo and can’t find one of the senior members to come here, and this speaks volumes about their respect for constitutional authority.”
While faulting the labour leaders’ absence, Deputy Speaker, Benjamin Kalu, in his opening remarks said: “We expect labour to be in the room. As rightly observed by my colleagues, we equally condemned the inability of NLC to attend. It is expected that in nation-building, they will become partners. The parliament remains the voice of the people.
“I know NLC has always spoken out on national policies, but I am worried that they would prefer this critical period to be in Geneva rather than partner with parliament over government policies. It is fair enough to criticise the executive, and it is our responsibility to check the excesses of the executive if such exist.
“I am sure they will take corrections as we partner with them. I commend the committee for sending them a series of letters, and I suggest you still ask the NLC to submit their memorandum to the house.”
