The organised labour, manufacturers, economic, financial and legal experts have warned the Federal Government not to remove electricity subsidy as canvassed by the International Monetary Fund and the World Bank.
The Senate has also rejected the plan by the Federal Government to increase electricity tariff through the removal of electricity subsidy.
The upper chamber likewise resolved to conduct a proper investigation into the reasons behind the call for the removal of electricity subsidy.
This is coming at a time when the country is battling with a cost of living crisis brought on by the removal of fuel subsidies, on the advice of the IMF and the World Bank.
The IMF, in its recent report, advised the Federal Government to completely phase out fuel and electricity subsidies as part of measures to address its economic challenges.
These subsidies, which it deemed inefficient and ineffective in reaching intended beneficiaries, were identified as worsening the nation’s fiscal challenges and hindering efforts to address poverty and food insecurity.
Contrariwise, while the removal of petrol subsidy, implemented in May 2023, was aimed at addressing the nation’s fiscal challenges, it has worsened living standards, with the disposable income of Nigerians experiencing a continuous decline amid inflationary pressures.
Therefore, major stakeholders have expressed strong opposition to the advice of the IMF for Nigeria to phase out electricity subsidies.
The labour centre advised President Bola Tinubu not to take such advice from the IMF and the World Bank, describing them as anti-people forces.
“We do not subscribe to increasing electricity tariffs. Nigerians are already suffering from the removal of fuel subsidy. Removing electricity subsidies will be another burden to the people.”
The NLC accused the IMF and the World Bank of pushing Nigeria to the edge of economic collapse by making such demands, especially at a time when the country is still reeling from the trauma and confusion of the extant adjustments in electricity tariffs and exchange rates.
The NLC argued that higher electricity tariffs would hurt the competitiveness of the Nigerian manufacturing sector, which is already struggling with low productivity, high costs, and poor infrastructure.
We also join other well-meaning Nigerians in calling on the government to be careful in taking this advice, because removing electricity subsidy will deepen the current crisis.
The advice that the Federal Government should take should be those that will assuage the sufferings of Nigerians and better their lives.
Going by the experience from the removal of the fuel subsidy, the money that is said to have been saved has not been accounted for.
Removing subsidies on electricity will not solve the problem the country has at hand.
We do not subscribe to increasing electricity tariffs. Nigerians are already suffering from the removal of fuel subsidy. Removing electricity subsidies will be another burden to the people.
The IMF and the World Bank are pushing Nigeria to the precipice by demanding higher energy rates and further devaluation of the Naira when the people are yet to recover from the trauma and confusion of the extant rates and devaluation.
It is basic knowledge that high energy rates are not good for competitive manufacturing.
Any attempt to accept the proposal will further dehumanize the already suffering population.
There is nothing to signify that money realized from petrol subsidy removal has been well utilized whereas the cost of running government is rising daily.
The IMF should be concerned about the deployment of subsidy gain from the petroleum sector and for the government to dutifully account for the money realized from that sector.
We urge the Federal Government to discard the deleterious policies of the Bretton Woods institutions.
The IMF feels entitled to plug Nigerian leaders with constant advisories on how to run our economy and society because we are always running to borrow from it.
History has, however, shown that the IMF and its Bretton Woods twin, the World Bank, are more concerned in propagating their neo-colonialistic interests than caring for the welfare of the populace in the Third World, Nigeria inclusive.
The IMF advice is akin to giving the Federal Government a rope to hang itself with, given the possible outcome of such a move at this juncture of extreme hardship in the country.
Because of the poverty-breeding structure of the Nigerian economy, the moves to fully commercialise the electric power market have not succeeded.
As a result, the Federal Government is forced to pay some money through the Nigerian Bulk Electricity Trading Company to make up for the shortfall from what the power companies are able to scrape from their public billings.
For instance, in 2023, the power companies were able to collect N783 billion tariffs whereas their total bill was N1.06 trillion. The Federal Government had to pay a N375 billion subsidy to make up for the shortfall.
If the subsidy on power is to be removed at this time, consumers will have to pay over 35 percent more than they currently do. They will also have to contend with capricious tariff increases that the power companies have been bristling to impose.
Though the argument is made that full deregulation will open the field for investors to come in, experiences have shown that Nigeria does not work quite like that.
Almost one year after the full removal of petrol subsidy, the Dangote and government refineries expected to vitiate the astronomical cost of petroleum products have failed to do that.
The removal of power subsidy now will be too much for the suffering Nigerian masses to bear. Already, the removal of petrol subsidy has pushed many manufacturing and service enterprises out of business, especially as the value of the Naira has gone down the drain. It may become the proverbial final straw that breaks the camel’s back.
Subsidy is a way of life, even in the developed, capitalist economies. Without welfare for the people, the government loses its relevance.
In a country where a greater number of the population lives below the poverty level, with stagnant wages, rising inflation and depreciating currency, the prospect of higher electricity bills is unattainable.
