At the time he was campaigning during the 2023 presidential election, Asiwaju Bola Ahmed Tinubu as candidate of the All Progressives Congress (APC) was quite clear about his belief in the logic of free market capitalism. In his election blueprint, which he called “the renewed hope agenda” he enunciated the core ideas around which he would run the economy. In the heat of the campaign trail, and the contest for votes, not many Nigerians paid attention to the details and implications of the policy proposals, which were put forward by candidate Tinubu.
However, closer scrutiny of the philosophy driving the Tinubu agenda made it apparent that frequent hikes in the charges for essential public services and public utilities will be the name of the game. Although the President is quick to describe himself as a pro-business leader, he has not provided perspective on whether his policies would work for small businesses or the bigger ones at the commanding height of the Nigerian economy. On page 31 of his Renewed Hope Agenda for instance, Tinubu made it abundantly clear that “we will enable DisCos to charge cost-reflective tariffs for electricity supply.”
However, contrary to the practice in a democracy where opposition actors are supposed to debate and push back on such ideas based on superior argument, mum was the word from the other serious contenders eyeing the Nigerian Presidency. They neither debated based on ideas, nor offered alternatives. The result was that not much of the governance ideas, which then candidate Tinubu put forward were properly scrutinised by the electorate. The fundamental question about implications of his policy choices for the economy, were hardly debated and scrutinised.
After winning the Presidency therefore, Tinubu subsequently moved to implement the package of reforms, snippets of which he had presented on the campaign trail. One of the outcomes of the reforms has been the escalating cost of access to public utilities and services. Firstly, the removal of fuel subsidy and the policy of the free floating of the national currency, the Naira, has had severe consequences in the form of the inflationary pressures. With the rising cost of goods and services, Nigerians groaned about the erosion of their purchasing power. With 163.3 million Nigerians adjudged to be multi-dimensionally poor by an index produced by the National Bureau of Statistics (NBS), it was apparent that the pockets of ordinary citizens would feel the effects of the economic policies of the Tinubu administration.
However, while the twin policy of subsidy removal and the free floating of the Naira has created the template for inflation to become the dominant narrative about the economy, the direct increases through hikes in electricity tariffs, data, port charges, and the reintroduction of toll gates on highways have further worsened the deprivation of millions of Nigerians. In April 2024, the Tinubu administration hiked electricity tariff for 1,974,385 customers in Band A by 230 percent from N68 per kilowatt hour (kwh) to N225/kwh. Although the government insisted that only between 15 to 17 percent Band A customers would be affected by the hike, the reality on the ground showed a lack of clarity and transparency in the determination of where electricity consumers belong in the band A-E categorisation.
The Federal Government was also quick to justify the April 2024 electricity tariff on the basis that the subsidy being paid by the government was estimated to be about 2.9 trillion. Its position was that paying such huge amounts was no longer sustainable. In February, from far away Dar Salam, Tanzania, Nigerians got wind of plans by the Federal Government for another round of electricity tariffs hike “within months”. Special Adviser to President Tinubu on Energy, Olu Verheijen, hinted that the current power tariffs would rise by about two-thirds.Verheijen noted Nigeria’s power prices need to rise by about two-thirds for many customers to reflect the cost of supplying it, adding that an increase should be expected within months.
Although the government later denied the reports of plans to implement another round of tariff hike, labour and civil society groups have urged the government to perish the thought. Citizen groups have also been quick to warn that another hike in electricity will further squeeze Nigerians, who have barely recovered from the excruciating effects of all the other hikes they have been made to face since the coming of the Tinubu Presidency.
It is not only in the electricity sector that Nigerians have been made to pay higher prices. The Nigeria Communications Commission (NCC) in February approve a 50 percent tariff hike by telecom companies, from the 100% requested by some operators. Despite public outcry and agitations by labour unions and civil society organisations, the regulator did not budge. The outcome is that telcos have now revised their templates and have gone ahead to charge the approved 50% hike. The operators argued that the hike is needed to enable upgrade of critical infrastructure supporting their networks, but nothing was said about how to ensure the telcos are accountable as they implement the new tariffs.
From the foregoing, it is apparent that the most favoured approach by President Tinubu’s economic team to cost issues in the delivery of public services, is to simply pass the burdens to already economically distressed Nigerians. For a critical area like the cost of energy, the government in its approach so far hardly makes any effort to think outside the box beyond slamming increments on Nigerians to pay. In climes were the effect of energy prices on the economy is prioritsed, the policy of price cap is usually introduced to regulate how much households and businesses can be charged for utilities like electricity. Also considering economic disparities, policies like price caps can also help prevent energy poverty by protecting the poor and vulnerable.
Similarly, a corresponding level of energy and efforts being devoted to commitments which will save consumers from exploitation, is yet apparent. A practical example is the President’s promise in the electioneering period that new electricity connections will not be permitted to be energised from the grid unless a metre has been installed. He also stated in his renewed hope agenda that DisCos will be required to ensure that new connections are metered during the construction phase. These commitments are apparently not being followed through. The burden of procuring electricity metres is being handed over to consumers, who a made to pay prices fixed by the DisCos. There are equally communities whose access to electricity is facilitated by their self-help projects, while the DisCos are no where to be found. The DisCos only show up when these investments have been made for the purpose of billing the consumers. Given the long suffering and excruciating economic pains Nigerians are facing, it is time for the government to give the people a break.
Although the prices of some food items are beginning to come down, the impact of the government’s policies, which culminated in the escalating prices of essential goods and services, will take a long time to overcome. The government should therefore focus on initiatives, which will reflate the economy and revive small businesses, many of which have collapsed as a result of high energy costs and a harsh business environment. With the current cost of Band A electricity, how many genuine small businesses can stay afloat?
It is important therefore for the government to put on its thinking cap to solve the price challenges in the delivery of essential services. It is equally the responsibility of the government to protect Nigerians from shylock service providers, who would stop at nothing to drain the lifeblood of the people. This is apparently why the marginal drop in the pump price of PMS recently noticed as a result of the price war between the Nigeria National Petroleum Company Limited and Dangote refinery has hardly translated to a corresponding marginal reduction in the prices of goods and services, especially in cases where traders and commercial vehicle operators leveraged the increase in fuel price as the premise for the hike in their goods and services.
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