The president of the Nigeria Labour Congress (NLC), Joe Ajaero, says the Nigerian Electricity Regulatory Commission (NERC) should reverse the electricity tariff.

Ajaero spoke on Monday when members of the labour body picketed the headquarters of the NERC in Abuja over the increase in electricity tariff.

The NERC on April 3 approved an increase in the electricity tariff for elite customers.

Ajaero said the protest was due to NERC’s unresponsiveness to the multiple letters sent by the NLC.

He added that the increase in tariff was arbitrary, noting that NERC did not consult relevant stakeholders before taking the decision.

The NLC president argued that Nigeria has 4,000 megawatts of electricity for over 200 million people, as against the global index of 1,000 megawatts for one million citizens.

“We are here on a peaceful protest having written so many letters to NERC that they cannot increase tariff without meeting with Nigerians, that the process of adjusting tariffs in every tariff methodology requires that they meet with all stakeholders, including labour, that we don’t know where this tarrif is coming from,” Ajaero said.

“And that NERC is not oblivious to the fact that Nigeria is wallowing in power poverty, that while the whole world gave a global index of one million people for 1,000 megawatts, Nigeria has 4,000 megawatts for over 200 million people.

“What Nigeria is generating today is not enough for Lagos, and it is bad enough to say some Nigeria are better than others; some will get 20 hours, some will get two hours; even in South Africa, such has never happened.

“Use the same magic that you are using to give some Nigerians 20 hours to give everybody in Nigeria 20 hours. Nigerians are saying no to discriminatory power allocation.”

He noted that the Manbilla power plant in Plateau state can generate 3,600 megawatts of renewable hydropower but has remained underperforming 30 years after its inauguration.

Ajaero urged the federal government to put an end to all taxes that could further increase the burden on Nigerians.

Members of organised labour are currently picketing offices of the Nigerian Electricity Regulatory Commission (NERC) nationwide.

The Nigeria Labour Congress (NLC), Trade Union Congress (TUC), and other affiliate groups, are protesting the increase in electricity tariff for customers under the Band A category.

On April 3, NERC approved an increase in electricity tariff for customers in the classification — from N66 to N225 per kwh.

Organised labour is calling for a reversal of the increase and a return to the negotiating table.

On Monday, the unionists arrived at the NERC office located at Novel House in Ikeja, Lagos, around 9:40am.

Addressing workers at the complex, Funmi Sessi, NLC Lagos chairperson, asked them to vacate their offices.

Sessi said the unions do not understand the regulatory functions of NERC amid the epileptic power supply in the country.

In Abuja, the unions besieged the NERC office located in the Central Business District.

Labour has also shut NERC offices in Jos, Akwa Ibom, Benin, Kaduna and in other capital cities across the country.

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The International Monetary Fund (IMF) has advised the federal government to remove petrol and electricity subsidies once the social protection scheme has been enhanced and inflation subsides.

IMF disclosed this in a report titled “Nigeria: 2024 Article IV Consultation”.

The suggestion followed a surge in Nigeria’s inflation rate, which rose to 33.20 percent in March 2024 — up from 31.70 percent in February.

IMF said about 15 million households or 60 million Nigerians will potentially benefit from an enhanced social intervention scheme the federal government developed with World Bank support.

“The authorities have recently approved an enhanced social transfer mechanism developed with World Bank support, and some initial payments have been made,” IMF said.

“In response to governance concerns, the authorities automated and digitalized the system to build a robust mechanism that delivers swift and targeted support to vulnerable households—some 15 million households or 60 million Nigerians potentially benefit from the scheme.

“Once the safety net has been scaled up and inflation subsides, the government should tackle implicit fuel and electricity subsidies.”

According to the IMF, the subsidies are costly and poorly targeted, with higher-income groups benefiting more than the vulnerable.

IMF also said with pump prices and tariffs below cost-recovery, subsidy costs could increase to three percent of gross domestic product (GDP) in 2024, compared to one percent of GDP in 2023.

SUBSIDIES TO DRIVE BUDGET DEFICIT UP

IMF said its staff projected a higher fiscal deficit than anticipated in the 2024 budget, adding that “higher implicit” fuel and electricity subsidies would drive the increase.

The federal government had projected N9 trillion budget deficit for this year.

Aside from the subsidies, IMF said other drivers are lower oil and gas revenue projections, continued suspension of excise measures included in the medium-term expenditure framework (MTEF), and higher interest costs.

“Staff factors in an under-execution of capital expenditure in line with past outcomes and estimates an FGN deficit of 4.5 percent of GDP relative to the 2024 budget target of 3.4 percent of GDP,” IMF said.

“For the consolidated government, this implies a projected deficit of 4.7 percent of GDP in 2024 —compared to 4.8 percent of GDP in 2023 measured from the financing side — which is appropriate given the large social needs and factoring in a realistic pace of revenue mobilization.

“Over the medium-term, staff projects consolidation in the non-oil primary deficit. With rising interest costs, government debt stabilizes towards the end of the projection period.”

On April 3, the Nigerian Electricity Regulatory Commission (NERC) approved an increase in electricity tariff for customers under the Band A category to N225 per kilowatt-hour (kwh), from N66 — to reduce electricity subsidy.

However, on May 6, electricity distribution companies (DisCos) said the tariff of Band A customers has been reduced to N206.80 per kwh.

On May 29, President Bola Tinubu announced petrol subsidy was gone, however, on August 15, 2023, TheCable reported the president was considering a “temporary subsidy” on petrol.

On April 15, Nasir el-Rufai, former governor of Kaduna state, said the federal government is spending more on petrol subsidy than before.

Also, Gabriel Ogbechie, chief executive officer (CEO) of Rainoil Limited, on April 17, said the federal government now spends N600 billion on petrol subsidy monthly.