The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf, said there should be a strategic approach to electricity pricing to avoid pushback from the consumers.
He said, “Only two months ago, there was a review. Now another review. The commercial arguments may be strong, but there is a social context to be reckoned with, especially given the kind of product in question.
“It is also important to reckon with the economic and political ramifications of such price reviews. We need to worry about the sensibilities of the people.”
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While reiterating the group’s support for a cost-reflective tariff for electricity, Yusuf said the transition to the new pricing regime should be strategic and gradual to minimise shocks and risk of pushback by the consumers.
He said, “Context matters in policy conceptualisation and implementation. We need to worry about social and economic contexts.
“The economy is currently in a recession, purchasing power has been significantly eroded across all income classes, poverty situation has been worsening, and there is spiralling inflation, there are fresh concerns about resurgence of the COVID-19 pandemic.
“These contexts should have a moderating effect on price movement at this time, especially for a product of high social significance. It is important to take these factors into account in order not to put the entire reform process at risk.”
The President, Electricity Consumers Association of Nigeria, Mr Chijioke James, expressed consumers’ opposition to the fresh hike in electricity tariff, describing it as ill-timed.
“Why would the government increase tariff at the beginning of the year, especially a time when unemployment is on the increase, disposable incomes of the citizens continue to deplete, inflation is galloping? This is evidence of insensitivity of leadership at a time like this,” he said.
A professor of Economics at the Olabisi Onabanjo University, Ago-Iwoye, Ogun State, Prof. Sheriffdeen Tella, said electricity tariff should not be increased at this point.
He said, “The electricity tariff is not supposed to be increased even if there is no second wave. They have not been quite efficient. In fact, what we are paying for is inefficiency.
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“They are not efficient in collecting their tariffs from everybody using electricity and that is where they are supposed to concentrate on, instead of taxing those who are paying to pay more.”
Tella called for the use of technology in collecting money from consumers.
However, Head of Tax, PricewaterhouseCoopers Nigeria, Mr Taiwo Oyedele, lauded the increase, saying he had advocated for people at the top to pay more for electricity consumption since they relied on it for several purposes.
