Nigerian consumers unhappy with rising electricity prices

A sudden increase in electricity tariffs in Nigeria, Africa’s most populous country, has sparked a backlash.

So far, Jude Okafor has spent an average of $25 on electricity to run the frozen fish and meat business he started in 2021. But since the government announced a nearly 300% increase in electricity bills last week, Okafor said running his business has been difficult.

“We have no escape,” Okafor said. “The light is getting stronger and the fuel is getting more and more. For a businessman, there is no way we can deal with this situation. If there is no light or fuel to freeze our fish, we will freeze our fish.” What should we do?” What to do? Our business is declining.This is [a] An act of first-rate evil. ”

The Nigerian Electricity Regulatory Commission (NERC) announced the price adjustment last Wednesday and said only larger electricity consumers (about 15% overall) would be affected by the subsidy cuts.

The authority said that consumers in this category can enjoy up to 20 hours of electricity use per day, and that the increase in electricity bills is only fair to consumers with shorter sunlight hours.

The decision to remove electricity subsidies is part of President Bola Tinubu’s reform drive to ease economic pressure.

Authorities believe state-controlled electricity prices are too low to attract new investors or allow distribution companies to recoup costs, leaving the industry saddled with huge debts.

Economic analyst Ogo Okiti said the government’s move was a good one.

“The government cannot pay these subsidies on time because they cannot [pay] “The gas companies are stopping the gas supply on time,” Okiti said. “The timing is right. I think the government waited until April to do that because they expected the power supply to improve from now on because [the] rainy season. ”

But the decision was criticized by many, including businesses, manufacturers and unions.

This week, the Abuja chapter of the Nigeria Association of Chambers of Commerce, Industry, Mining and Agriculture (NACCIMA) said the decision would threaten the survival of thousands of businesses already grappling with soaring inflation.

NACCIMA National President Dele Oye said: “First of all, the timing is not right. We all know that electricity prices are low but at some point, there has to be some level of subsidy. There is no place in the world where electricity prices are subsidized .” There is no subsidy. If we have to pay for everything at market value and we don’t see market value services provided by the government, we can’t compete. We build roads. We as investors ensure our safety. ”

Nigeria last revised electricity prices four years ago. Authorities say eliminating subsidies could save the country up to $2.6 billion.

But similar reforms to petrol last year exacerbated a cost-of-living crisis for many Nigerians as annual inflation rose to more than 30% – the highest level in three decades.

Critics will be watching the latest progress on eliminating subsidies.