The Face-off over Electricity Tariff Hike
Last Monday’s protest by organised labour against electricity tariff hike has once again frosted relations between labour and government,
Since the inception of the President Muhammadu Buhari-led All Progressives Congress (APC) government, the organised labour has been inching to tackle government over some policies like subsidy removal, electricity tariff hike and others. With increment in electricity tariff, labour last week took to the streets across the 36 states of the federation to express its displeasure. From the Federal Capital Territory (FCT), Abuja to states’ capitals, labour made clear its discontentment, describing government’s action as ‘morbid intention’.
Matching across major streets in Abuja in protest to oppose the electricity tariff increase, Nigerian Labour Congress (NLC), President, Comrade Ayuba Wabba, deplored the role of the Nigerian Electricity Regulatory Commission (NERC) in conniving with distribution companies (Discos) and generating companies (Gencos) to hoodwink Nigerians. He accused the commission of colluding “with the Discos to exploit Nigerians. This is outrageous, this is the extended corruption that Mr. President must fight headlong. Any Nigerian that has been given an estimated bill should not pay. People that have bought the PHCN we are aware some them are incompetent and cannot drive.”
Wabba maintained that “the consultation was only restricted to the families and cronies of those who bought the companies. We call on Mr. President to quickly put on the board of this commission. A lot of companies are going under because there is no electricity to power. Instead of increasing tariff, let generation be increased.”
At NERC headquarters in Abuja, President of the Trade Union Congress (TUC), Boboye Kaigama, said failure by the government to heed the demands of the organised labour will push the union to resort to self-help. Kaigama said: “The next time we come here is to occupy this office. It is our collective wealth, if they are conniving with the DISCO and JENCO to deprive Nigerians of electricity, to deprive Nigerians of equity, it’s a right not a privilege, if NERC cannot do its work, the organised labour will do it. Today, we are here witnessing the change that we voted for and the change is bringing darkness for us. We didn’t vote for a change that we will see darkness at the end of the tunnel. We voted for change to see light at the end of the tunnel. If the rule of law cannot perform, self-help will perform.”
While tackling the Minister of Power, Works and Housing, Mr. Babatunde Fashola, Kaigama said the increase was carried out without recourse to the position of the organised labour.
He argued that, “if the tariff is not reversed; if this is not done, we are prepared to take over all the Discos, we haven’t seen where a legal luminary will disobey the orders of the court,” Kaigama stated.
At the National Assembly, where the protest was intense, the union leaders were welcomed by Senate President Bukola Saraki, Senate Leader Ali Ndume, Sen. Dino Melaye, Sen. Andy Uba, among others. The organised labour called on the lawmakers to compel the executives, in particular, Minister of Power, Works and Housing, Fashola and officials of NERC to maintain the status quo.
Wabba who presented the case and grievances of the union to the lawmakers said: “Governance is about the good of the people. The companies were privatised five years back, we expect that by now they must have added value, but instead of adding value, they try to exploit Nigerians by increasing the tariff.
For the past five years, tariff has been increased. What makes this increase outrageous is that it is an increase of N14 to N24 per unit, between 45 per cent to 60 per cent. We have made the point very clear in this difficult economic situation, it is difficult for Nigerians to swallow this very bitter pill. Nigerians must be carried along in every policy,” he said.
“The best thing is to let the law be strengthened where tariff cannot be increased unilaterally. Everywhere in the world, people pay for what they have consumed. Tariff must be matched with the quantity of electricity consumed. Whether you have light or not, you pay, you even pay for darkness, we are also paying for inefficiency. The authorities must listen to the cries of the masses. We are here so that this issue can be resolved. We are also demanding that this tariff must be halted,” Wabba stated.
Speaking in the same vein, Leader of the Labour - Civil Societies Coalition and former President of Academic Staff Union of Universities (ASUU), Dr. Dipo Fashina, urged the National Assembly to halt all privatisation of public enterprises that have been sold to private individuals.
Fashina explained that the current crisis emanated as a result of disobedience to the constitution.
He argued that “the constitution of Nigeria stipulated that the commanding heights of the economy shall not be in private hands, virtually now, all the commanding heights of the economy have been sold out to private individuals.”
“We want the Senate to reverse the tariff immediately, apart from that, the Senate must protect the poor. Majority of Nigerians cannot afford the evil that is going on. Stand out and reverse all the privatisation of all our roads, airlines, Ajaokuta Steel, “Fashina said.
N’Assembly Stands with the People, Labour
Senate President Bukola Saraki, in his response, said: “I want to assure that the 8th National Assembly is for the people. You will recollect even before now, we too have observed that this issue and some of the tariffs were not palatable and we summoned the NERC, even before now, we were with you. We stand with you and we will ensure that no policy will in any way not be palatable to the masses and people. Yes we want more power; yes we want more power improvement but not at the detriment of the masses.”
He contended that “there must be consultation, because we are here at your instance and it is by virtue of you that we are here. We cannot make laws or policies without the people. I want to assure you that this 8th National Assembly will always stand for what will ensure the survival of the masses. We are not blind, we are not dull, we can see the problems. Give us time, we will call the executives, we will engage with them. We will do it immediately. We are people here for action, and you will see the action immediately. Part of the action is to come out here, to stand before you to make a commitment and you will see the action. We are of the same generation.”
With increment in electricity tariff, labour last week took to the streets across the 36 states of the federation to express its displeasure. From the Federal Capital Territory (FCT), Abuja to states’ capitals, labour made clear its discontentment, describing government’s action as ‘morbid intention’
Saraki said: “Time is gone for that nonsense, the time is a new path, a new direction. Everybody’s eyes are now opened, nobody can fool anybody. I can assure that nobody will deceive the masses. We will consult with you, we will do the right thing. We will agree where we have to agree. And at the end of the day whatever we do will be in the interest of the people of Nigeria,” the senate president submitted.
Government’s Position on Tariff Protest In its reaction to the protest by organised labour, the federal government and the Nigerian Electricity Regulatory Commission (NERC), which is charged with the task of regulating the electricity market, explained that the decision to increase electricity tariff was done in the interest of the country.
While NERC indicted the NLC for failing to maximise the opportunities it provided during the tariff consultation period to lodge its complaints, the government through the Minister of Power, Works and Housing, Mr. Babatunde Fashola, said that it was a tough but necessary choice to be made.
NERC also said that the tariff framework had a democratic window of 60 days within which any one that is upset with the rates can appeal to it and such complaints would be honestly attended to.
According to the Acting Head of NERC, Dr. Anthony Akah, in a telephone chat with THISDAY, labour had failed to attend all its consultations prior to announcing the tariff. The union, he added, could not have taken to the streets without first having its reservations tabled before the commission for consideration.
Akah equally noted that the union had not exhausted the democratic opportunity provided for any appeal against the tariff as contained in NERC’s Business Rules. He said the rules give anyone such timeframe to lodge complaints that will be attended to by NERC.
“We had expected that organisations such as the labour union would take advantage of the 60-day window available to anybody to contest the tariff before heading into the streets in protest.
“Anyhow, they have exercised their democratic rights but we also feel that they have not exhausted an already existing democratic measure to ask for any redress in the new tariff,” Akah said.
He explained that: “The protest, in our view, when they have not taken advantage of the 60 days window, was totally unnecessary because they will just heighten up the uncertainty that we are trying to minimise in the sector because we are also exposed to foreign financial investments in the sector. They should have also been mindful of the fact that this is before a competent court of jurisdiction and restrain from such acts. They would have exhausted the democratic opportunity in the tariff.”
Similarly, Fashola said that although the decision to increase tariff was a hard one, the thought that the country’s electricity system would collapse without a cost reflective pricing regime pushed it to act reasonably. The minister had at a meeting in Lagos said: “It is a hard decision, but we appeal to all for understanding because we are doing it in the interest of all the people. We do not have many choices but we promise that it will get better.”
Labour Urged to Demand for Efficiency The NERC also asked the NLC to consider channeling their protests to demand for improved efficiency in the sector, which according to it, is what the new tariff would engender. Akah stated that while the new tariff was a corrective measure, its deliverables should add value to electricity consumers. He explained that a standard service level agreement with the distribution companies had been extracted for the tariff to become active.
These agreements include improved metering of consumers, speedy phase-out of unscientific estimated billing methodology, surcharge for load shedding and massive network infrastructure expansion to bring hitherto uncovered areas into the various distribution networks and expand access
to electricity. He, in this regard, asked the NLC and its affiliates to consider holding the Discos and government to account on efficiency of electricity supply instead of protesting the tariff raise.
Fashola gave the assurance that the sector’s challenges could be solved with the right tool if allowed to stand. He reiterated that rather than start a disruptive fight, labour and all concerned stakeholders should embrace the path of productivity.
“It is important to also state that the stability we have experienced in the market is comforting and we must do everything to protect it. That stability is giving confidence to the banks, to the gas investors, to the Gencos and a lot of them are coming into Nigeria. They want to participate in power and it’s because of the stability that the government and leadership of the president have provided and we must do everything to protect that stability,” Fashola said.
That notwithstanding, last Monday’s protest by the organised labour may just be a tip of the iceberg of the discord between labour and government in the offing. At the moment, labour is vehemently opposed to subsidy removal which government has stylishly tinkered with. When you add the possible hike in fuel price because of subsidy removal when price of crude oil rises, labour and government have several scores to settle in the days ahead.
Close watchers of events also opined that the process leading to the increment was haphazardly packaged by government and its agencies and dumped on the people.
Further, there is a temptation on the side of government to equate improved electricity with tariff increment. Labour on the other hand argued that the maths don’t add up. For now, it is hoped that the National Assembly will bring the two warring parties to the negotiation table, where the crisis emanated in the first place. Should that fail, labour said they were bent on disrupting the nation’s economic activities. Such threat is one credential the Buhari government should strive to avoid. Already, public opinion across board is against electricity tariff hike in view of poor power supply and the inability to provide metered billing to all consumers. The coming days will tell how both labour and government resolve this issue.
According to the Acting Head of NERC, Dr. Anthony Akah, in a telephone chat with THISDAY, labour had failed to attend all its consultations prior to announcing the tariff. The union, he added, could not have taken to the streets without first having its reservations tabled before the commission for consideration