Kemisola Oye
HUMAN rights activist and Chairman of the Alliance on Surviving COVID-19 and Beyond (ASCAB), Mr Femi Falana has called on the Federal Government to institute a panel of inquiry to investigate the claim of the Minister of Power, Mr. Adebayo Adelabu that electricity subsidy for 2024 is N3 trillion.
Mr Falana, who was reacting to the recent increase in tariff electricity for some categories of electricity consumers, said the inquiry is necessary as arrangements have been concluded by the Nigerian Electricity Regulatory Commission (NERC) to further hike electricity tariffs under the pretext of removing subsidy from the sector.
*The panel should also inquire into the diversion of the N32 billion paid into the account of a private company in 2003 for the supply of three million prepaid metres in the country”, the senior lawyer urged.
Mr Falana equally observed that On 23 March 2021, the Federal Government announced its plan to end the electricity subsidy by the end of that year. Quoting Special Adviser to former President Muhammadu Buhari on Infrastructure, Mr. Ahmad Zakari as saying “We plan to eliminate subsidies by the end of the year. People will say if you eliminate subsidies, you will have poor people pay more. But our argument is that the only reason the power prices in Nigeria are high is because we don’t generate enough. If you generate 10GW of power, the tariff will be half of what it costs. So, keeping the prices very low is not the approach, but delivering adequate power.”
Mr Falana also said that on 12 March 2022, the Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed that the Federal Government had quietly removed electricity subsidy. According to him, speaking at a virtual meeting of African Finance Ministers and the International Monetary Fund, Ahmed also said the amendment of the budget was ongoing to accommodate the incremental removal of fuel subsidy. The theme of the meeting was ‘The Political Economy of Fiscal Reforms’.
Mr Falana further quotes Ms Ahmed as saying, “We are cleaning up our subsidies. We had a setback; we were to remove 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. 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.”
The senior lawyer however noted that to the utter dismay of Nigerians, the current Minister of Power, Mr. Adebayo Adelabu claimed on 15 January 2024 that, “the Federal Government still subsidize electricity because the current tariff DisCos are allowed to charge is not cost-reflective. This is why the Federal Government spent close to N700 billion in 2023 to subsidise electricity. If tariffs are left at this current rate, it is projected that the government will spend about N1.7 trillion to subsidise electricity. The FG cannot afford that.”
“On 6 March 2024, the International Monetary Fund (IMF) warned that continuation of fuel and electricity subsidies will cost Nigeria N2.33 trillion or three per cent of its Gross Domestic Product (GDP) in 2024. The warning was given by the team led by Mr. Axel Schimmelpfennig, IMF Mission Chief for Nigeria that visited Lagos and Abuja, on 12–23 February 2024, to hold discussions for the 2024 Article IV Consultations with Nigeria.
“Last week, the Nigerian Electricity Regulatory Commission (NERC) approved an increase of electricity tariff to N225 ($0.15) per kilowatt-hour from N68. The 300 percent hike taken for urban consumers, also known as Band A consumers in the country, took effect from 1 April 2024. In justifying the insensitive hike, the Minister of Power, Mr. Adelabu said that the government was subsidising 67 per cent of the cost of generating, transmitting and distributing power in Nigeria, amounting to over N3 trillion, which he put at 10 per cent of government total revenue.
“From the foregoing, it is undoubtedly clear that the IMF and the Federal Government are juggling figures of electricity subsidy to blackmail and deceive the Nigerian people. Whereas the IMF claims that “fuel and electricity subsidy will cost Nigeria N2.33 trillion” in 2024, the Federal Government has given a subsidy figure of N3 trillion from the sum of N700 billion allegedly consumed by subsidy in 2023. Curiously, the Federal Ministry of Finance has failed to reconcile the conflicting figures being peddled around by the IMF and Ministry of Power.
“Since the Buhari administration stopped electricity subsidy in 2022, the Federal Government should institute a panel of inquiry to investigate the claim of the Minister of Power, Mr. Adebayo Adelabu that electricity subsidy for 2024 is N3 trillion. The inquiry is necessary as arrangements have been concluded by the Nigerian Electricity Regulatory Commission to further hike electricity tariffs under the pretext of removing subsidies from the sector. The panel should also inquire into the diversion of the N32 billion paid into the account of a private company in 2003 for the supply of three million prepaid metres in the country”, he stressed.
Eighteen-Eleven Media