Power sector and rural communities – Thisday

Electricity tariff in many rural communities is excessive

High tariff being charged by the electricity distribution companies (DISCOs) in the rural communities in Nigeria is a serious problem that should concern the authorities. Today, several of these communities across the country have been cut off from power supply, some for upwards of two years. Some villages where there are neither air-conditioning systems nor heavy appliances in any homes are being slammed with multi-million naira electricity bills that are in most instances several times the Gross Domestic Product of their people aside the fact that power is hardly ever supplied to them.

Many have laid the blame of this problem squarely on the shoulders of the Nigerian Electricity Regulatory Commission (NERC). By virtue of the Utilities Charge Act, the commission is empowered to evaluate, on a continuing basis, trends in tariffs with a view to providing the federal government information as would assist in policymaking. “If you check properly, the calibre of people who steal energy are the top guys. They are those people who you think will never do such things, not the small people in the society,” said the NERC Commissioner, Finance and Management Services, Mr Nathan Shatti last week. Unfortunately, it is the same poor people that are being unduly harassed by the managers of our power sector.

In the last three years or more, rural electricity tariffs like the urban ones have gone up several percentage points. The net effect has been a steady decline in rural economic growth except in a handful of states where the Central Bank of Nigeria (CBN) is subsidising agricultural activities. The troubling part is that a government that came to power on the pretext to help the poor has not even recognised the empowerment of rural areas as a priority. At a period when both poverty and hunger continue to saturate our country’s landscape, not providing the necessary infrastructure, of which power is key to the rural areas can only compound the problem.

Three years ago, residents of the Apapa-Iganmu and the Ifelodun Local Council Development Areas of Lagos State marched in protest to the premises of the Eko Electricity Distribution Company over what they described as “crazy bills” served on them. The residents said their monthly electricity bills were not only excessive but also exploitative. “This act is inhuman and condemnable,” they said in a statement. “Badia and Amukoko are low-profile populated areas yet our electricity bills are higher than our house rents.”

While we believe that the Discos must recover their costs even as we sympathise with them over the operating environment, the authorities must be concerned by the manner in which the poor of our society, especially those who reside in the rural areas, are being increasingly cut off from the rest of the world and the implications of such a state of affair on the economy of the country.

Meanwhile, the migration of the majority of our people from poverty in the shortest possible time should be a priority of our development strategy. Central to success in this regard is an electricity tariff structure that recognises the low income levels in our rural areas. Therefore, the power sector reform can only succeed if government recognises its social responsibility to empower the rural populace through the provision of affordable electricity supply. The multiplier impact would accelerate economic development and raise standards of living in the rural areas. To this extent, a certain subsidy element must of necessity apply in electricity tariffs in the rural areas.

In an environment where subsidy has become a by-word for corruption, this will take proper planning but government needs to bear this burden as an integral part of a deliberate development policy measure for the rural areas. It will also help the Discos to cushion some of their enormous credit exposure.

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