Wednesday, 22 May 2013
Electricity: If Tariff Is High, Try Generators
The recently announced hike in electricity tariff from July 1, 2011 by the National Electricity Regulatory Commission (NERC) will certainly open a floodgate of emotions. NERC said in a statement that “This development will see to a marginal increase in kilowatt hour of electricity from N8.50 to N10.00 from that date”. This is in line with the Multi-Year Tariff Order (MYTO) approved in 2008. Predictably, most negative reactions that might trail this new tariff regime will be more emotional than rational.
The reasons are not far-fetched. When NEPA held sway, it was mostly known to Nigerians as “Never Expect Power Always” because the body was so innately corrupt, embarrassingly incompetent, and disastrously wasteful that it gradually reversed its mandate to that of supplying darkness. In fact, that big-for-nothing behemoth performed so abysmally that it not only clenched the inglorious prize of the most corrupt agency in Nigeria at a time, but it also took tolls on the lives and livelihood of Nigerians. Then enter the Power Holding Company of Nigeria (PHCN) following the policy thrust of deregulation and splitting up therapy. But the expectations of Nigerians for improved power supply were brutally betrayed yet again. PHCN is not only notorious like its forebear; Nigerians have also ingeniously renamed it “Now Problem Has Changed Name” (PHCN).
So, I am not surprised Nigerians are already asking a plethora of quite germane questions. Why should we be made to pay for government’s and PHCN’s age long ineptitude? Why should we pay more money for more darkness? Why should we pay for budgetary allocations that have perennially ended up in redundant vaults of military and civilian kleptomaniacs, power sector officials and contractors? Unfortunately, the questions, germane as they are, won’t get any answers yet- not before the new tariff regime takes off.
And the answers, if they ever come, won’t lead us out of darkness. It is pure waste of time.
However, when we transcend the emotional plane to that of reason, we would probably find out that our problem is not actually with the increase in tariff, but with the lack of confidence in the capacity of our system to render service in return. In fact, our anger is just the same as the anger and repulsion we feel over taxes. This was a point of discussion among myself, two Ghanaian friends, a Sudanese, and a Tanzanian during a course on Decentralization, Democratization and Development at The Hague Academy for Local Governance, Netherlands last March. We found out that the Dutch pay their taxes without grudges. You needn’t ask why, because you could see that their monies work for them in all ramifications- social infrastructures, social welfare, etc. Cost of say electricity and other socio-economic infrastructures in developed world may even be higher, but you can go to bed, rest assured of service delivery once you foot your bill.
Unfortunately, it is not exactly so in Africa. It is not that Nigerians or Africans are really averse to paying taxes. They are rather averse to using their hard earned incomes to fund the bottomless pit of avarice that pervades governance and public service. They are averse to dropping more coins into the coffers of say, a local government, while they are buried in mountains of refuse. It is crazy to expect a local government which failed to manage household waste, even after receiving N60 million a month, to do so after collecting your paltry tax! In the same vein, it is not that Nigerians wouldn’t want to pay higher tariff for better service. They, especially those yet to benefit from the prepaid metres, are rather worried about the usual habit of slamming consumers with bogus bills for supplied darkness.
Instructively, NERC has come out with very sound justifications for the increase in tariff. Among others, it will attract the needed local and foreign investment into the power sector. This is understandable because investors are no Father Christmas. They put in their money where they would break even and reap bountifully. That is just why the Nigerian telecom is expanding and seeking accommodation like corn food. But the question is how repositioned are the mentality and competence of our regulatory agencies to ensure utility delivery and that hapless Nigerians are protected from profiteering as have become prevalent in the telecom sector?
In any case, however, increased electric tariff will always be cheaper, more environmentally friendly, convenient, and economical than running the nation and her economy on electric generators as has been the case over the years. Let me share a personal experience. The electric transformer in the estate where I live packed up some months ago. With an insensitive landlord that never cared a hoot, it behoved on us to contribute N100 thousand per flat to buy a new one. We didn’t find the contribution funny, though, because it was purely the responsibility of the landlord to provide such facility. But until we did so, I was spending N2,000 every two days (about N30,000 a month) to power my generator, with the attendant environmental pollution, noise, and health consequences. My experience is not far from our national experience. You could never compare public power and this generator syndrome.
Some have argued that the government should have revamped the power sector and put it on track before tariff hike. Honestly, that would have been ideal. But how many times have we poured our scarce resources into the power sector without results. We may actually have to wait till eternity, just as we waited endlessly for the defuct NITEL to render effective telecoms service when it was the alpha and omega, but to no avail. No thanks to corruption an the Nigerian factors. I am not sure I pay more for telecoms services now. But even if I do, it is far more effective and convenient with myriads of choice, the profiteering engendered by weak regulalatory system notwithstanding.
As such, I believe we will still be better off as a nation even with the new tariff, provided the NERC lives up to its promise to be resolute and uncompromising in ensuring compliance and imposing sanctions on chief executive officers and managers of companies that fall short of the required standards. But if anyone thinks otherwise, let him/her try generating sets or “better” still, darkness.
Public Affairs Analyst, Abuja