Will higher electricity bills solve Nigeria’s power problem?
Nigeria's electricity bills have been silently increasingly

Another month, another not-so-secret electricity tariff hike.

For over two years, power sector tariffs have been going up with little to no notice given to electricity consumers. In the past two years, power sector tariffs have increased from about ₦30/kWh to ₦76/kWh for some consumers, a 150% increase.
 

Key takeaways:

  1. Electricity tariffs in Nigeria have increased again, with some customers paying over ₦70/kWh.

  2. For over six years, electricity tariffs in Nigeria were frozen at about ₦30/kWh, contributing to years of inefficiency in the power sector.

  3. While electricity tariffs must keep increasing till they are cost-reflective, there are still other issues in the power sector that require attention.

 

On the one hand, it’s clear why the power sector has chosen this strategy. The last two times Nigerians were sufficiently pre-warned of an electricity tariff hike, in 2014 and 2020, the Nigerian Labour Congress (NLC) threatened to call nationwide strikes, prompting a halt to the hike.

So, the Nigerian Electricity Regulatory Commission (NERC), in its infinite wisdom as the sole regulator of the Nigerian power sector, decided to stop warning Nigerians. Instead, they would mandate discos to increase tariffs like thieves at night and let customers notice (or hopefully not notice) the next time they tried to recharge their meters.

So far, NERC’s strategy has been devious but remarkably effective. The most recent hike happened in December 2022 when Nigerians were distracted by Christmas rice, detty December and never-ending petrol queues. Even now, in January, when some Nigerians have noticed and are calling for a reversal, the silence from organised groups like the NLC is deafening.

Still, some Nigerians are understandably upset because the hikes haven’t really improved the electricity supply in Nigeria. This article will explore how tariffs have been increasing, why tariffs need to keep increasing (sorry), and why tariff hikes alone won’t automatically improve electricity access.

First, let’s pull the hood back on the tariff hikes so far.

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Noelle Okwedy

Noelle Okwedy

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