Explainer: Buhari’s Cost-Reflective Electricity Tariffs

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When it comes to electricity in Nigeria, aside from the benchmark of having little or no power supply, citizens are left with no choice than to pay exorbitantly for electricity. Bills are independent of the supply.

President Muhammadu Buhari has directed a nationwide mass metering program for electricity consumers in the country. This was made known in a press statement issued by the Nigerian Electricity Regulatory Commission (NERC) on Wednesday, August 26, 2020, and signed by its Executive Chairman, James Momoh. That is, an implementation of cost-reflective tariffs for the Nigerian Electricity Supply Industry (NESI) will kick off on September 1, 2020.

The President has directed that there should be a nationwide mass-metering program in an effort by the Federal Government to put a stop to estimated and arbitrary billing for electricity.

Customers receiving less than 12 hours of supply will also not experience any change in tariffs.

In all cases poor and vulnerable Nigerians will not experience any increase; in line with these expectations, DISCOs are directed to engage with their customers on a Service-Based Tariff structure.

Here’s what you need to know

  • Implementation of new tariffs is one of the preconditions given by the World Bank for a $3 billion loan applied for by the Federal Government.
  • Other conditions given were the removal of fuel subsidy and the unification of the exchange rate.
  • There will be more power supply. That is, cost-reflective.
  • Nigeria’s inflation rate might deepen.
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