Manufacturers and organized labour in Nigeria have strongly criticized the government’s recent decision to raise electricity tariffs. The Nigerian Electricity Regulatory Commission (NERC) recently announced a significant hike in tariffs for Band-A Customers, which make up about 15 per cent of the nation’s power users. These customers, who were promised up to 20 hours of daily supply, will now have to pay N225 per kilowatt-hour (kWh), marking a substantial 240 per cent increase from the previous rate of N68/kWh.
This move has sparked widespread opposition from both manufacturers and organized labour. The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) have expressed their strong disapproval, highlighting the potential negative impact on the economy. They argue that the increased cost will severely affect manufacturers, worsen inflation, and hinder the growth of small and medium enterprises (SMEs). Furthermore, there are doubts about the actual availability of the promised 20-hour daily power supply across Nigeria.
The government defends the tariff hike by pointing to the unsustainable nature of electricity subsidies. Musiliu Oseni, Vice Chairman of NERC, explained the necessity to reduce the projected N2.9 trillion expenditure on power subsidies for 2024. However, the complete removal of subsidies for Band A customers has been met with criticism. Both manufacturers and labour unions warn that it will lead to business closures and further burden consumers with higher electricity costs.
Adding to the controversy, NERC has reportedly downgraded some customers who were previously classified under Band A. This means that even those who did not consistently receive 20 hours of power will now face a higher tariff regime.
The announcement has raised concerns about the government’s efforts to improve the nation’s power sector. With growing discontent among key stakeholders, it remains to be seen how the situation will unfold in the coming days.
