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Electricity subsidy doesn’t exist, IMF, FG deceiving Nigerians – Falana

Human rights lawyer and the chair of the Alliance on Surviving COVID-19 and Beyond (ASCAB) Femi Falana, has said electricity subsidies no longer exist.

He accused the Federal Government and the International Monetary Fund (IMF) of deceiving Nigerians about subsidy payments.

Falana, a senior advocate, also said the Federal Government, through the Nigerian Electricity Regulatory Commission (NERC), planned to extend electricity tariff hikes beyond Band A consumers to other Nigerians categorised under other bands.

The lawyer, in a statement he signed and sent to The ICIR, said the recent tariff increase for Band A consumers by the government could not be justified under the Electricity Act 2023.


 

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He threatened to approach the courts to seek redress for Nigerians.

The activist argued that the Federal Government had already removed the electricity subsidy in 2022 and so the government, by the new tariff hike, was making Nigerians pay for the inefficiency and profligacy of those managing the electricity sector.

Falana recalled that on March 23, 2021, the Federal Government announced its plans to end electricity subsidies by the end of that year. He quoted the special adviser to former President Muhammadu Buhari on Infrastructure, Ahmed Zakari, who said, ” We plan to eliminate subsidies, you will have poor people pay more. But we argue that the only reason the power prices in Nigeria are high is because we don’t generate enough. If you generate 10W of power, the tariff will be half its cost. So keeping the prices very low is not the approach, but delivering adequate power.”

Falana also quoted the statement by the former Minister of Finance, Budget and National Planning, Zainab Ahmed, who further confirmed electricity subsidy removal on March 12, 2022, at a virtual meeting of the African Ministers Conference and the International Monetary Fund (IMF).

“We are cleaning up our subsidies. We had a setback; we were to remove the fuel subsidy by July this year, but there was a lot of pushback from the polity. We have elections coming, and because of the hardship that companies and citizens went through during the COVID-19 pandemic, we just felt that the time was not right, so we pulled back on that.

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“But we have been able to quietly implement subsidy removal in the electricity sector, and as we speak, we don’t have subsidies in the electricity sector. We did that incrementally over time by carefully adjusting the prices at some levels while holding the lower levels down,” Zainab Ahmed had said.

He further quoted the IMF’s Mission Chief for Nigeria, Axel Schimmelpfenning, who warned that the continuation of fuel and electricity subsidies would cost Nigeria N2.33 trillion or three per cent of its gross domestic product (GDP) in 2024.

Schimmelpfenning said this when he visited Lagos and Abuja on March 12, 2024.

Falana disagreed with the IMF and insisted that the Buhari administration had already confirmed electricity subsidies no longer exist.

Notably, NERC had, on April 3, 2024, raised the electricity tariff for customers enjoying 20 hours of power supply daily. Customers in this category are under the Band A classification.

The increase will see the customers paying N225 kilowatt per hour from the current N66, a development that has been heavily criticised by many Nigerians, considering the suddenness of the tariff hike and the current hardship in the country.

The Minister of Power, Adebayo Adelabu, subsequently said the new electricity tariff hike would only affect 1.5 million of the about 12 million consumers.

However, Falana declared the electricity subsidy non-existent and alleged that the government is trying to raise funds for cash-strapped electricity distribution companies (DisCos).

He said, “Under that law, there are certain steps to take, and we are going to embark on those steps tomorrow (today) which is to raise serious objections concerning the impunity that has characterized the recent increase.




     

     

    “At the appropriate time if there is no response, we will have to go to court because the government had warned, the minister had warned that the increase this time around will only fetch the government or the discos N1.6trillion whereas the destination is N3trillion.

    “So, the poor people that he (the minister) is talking about, the other bands, very soon, the government is going to extend the increases to them so that the N1.4trn the minister is talking about will be recovered.”

    Falana who further spoke on the electricity subsidy in a monitored interview at Channels Television on  Politics Today late on Sunday, April 7  said, “The government is increasing tariff to assist the cash-strapped discos majority of which have now been taken over by the banks and AMCON, and the banks and AMCON have no competence to run electricity companies.”

    Falana blamed the government for being insensitive to the plight of Nigerians who are still grappling with the economic impact of petrol subsidy removal and the collapse of the foreign exchange windows – the two policies of President Bola Tinubu’s administration that have resulted in an unprecedentedly high cost of living.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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