Economist Urges Nigerian Government To Scrap Band A Electricity Tariff

 

Economist Urges Nigerian Government To Scrap Band A Electricity Tariff.

Renowned political economist Professor Pat Utomi has called on the Federal Government of Nigeria to urgently review and potentially abolish the Band A electricity tariff, labelling it as “exploitative” and economically unsustainable. Speaking at a news conference organised by The Big Tent, a socio-political group, in Lagos on Monday, Utomi argued that the current tariff structure is placing an undue burden on Nigerians, particularly the working class. 

The Band A category, part of the service-based tariff system introduced by the Nigerian Electricity Regulatory Commission (NERC) in November 2020, applies to customers who receive a minimum of 20 hours of electricity supply daily. These consumers, who represent approximately 15% of the nation’s electricity users but account for 40% of consumption, pay the highest rates for their service. However, Utomi contends that the high tariffs are disproportionate to the economic realities faced by many Nigerians.

“For instance, a university professor in the Band A category spends up to 75% of his salary on electricity alone,” Utomi said, highlighting the severe financial strain on professionals. “If not urgently revalidated, this tariff system will further impoverish Nigerians, especially the working class, and lacks economic sense.” 

Utomi’s critique comes amid broader concerns about Nigeria’s electricity sector, which has faced persistent challenges, including frequent grid failures and inadequate infrastructure. Earlier this year, NERC approved a 300% tariff increase for Band A consumers, raising the rate from N68 per kilowatt-hour to N225, effective April 2024. Although a slight reduction to N206.80 per kWh was announced in May 2024 due to naira appreciation, many Nigerians continue to decry the high costs and unreliable supply. 

The economist also called on the National Assembly to prioritise legislation that addresses pressing national issues over routine oversight functions. He stressed the need for electoral reforms ahead of the 2027 elections to ensure a fair and transparent process. “It is a disservice to Nigeria if we approach 2027 with a flawed constitution,” Utomi remarked. He further advocated for decentralised policing, proposing that communities and states establish their own armed police forces to tackle rising insecurity. 

Utomi also highlighted the need for reforms in the land tenure system to support agricultural development. He noted that many farmers struggle to access financing due to insufficient collateral, compounded by a lack of production and processing infrastructure. “The National Assembly must work on establishing land registries to assign value to land, making it easier to buy and sell,” he urged. 

Describing Nigeria as a nation at a crossroads, Utomi insisted that it is not a failed state but one that can be steered away from collapse through collective action. “The existential threats facing Nigeria can be addressed if citizens rally to save the country,” he said. He envisioned Nigeria as a beacon for African progress, leading other nations towards prosperity, akin to the economic success seen in South East Asia. 

The call to scrap the Band A tariff has resonated with many Nigerians, who have expressed frustration over the rising cost of living and unreliable electricity supply. In April 2024, the Nigerian Labour Congress and Trade Union Congress condemned the tariff hike, warning that it exacerbates economic hardship and stifles growth. As the debate continues, Utomi’s remarks underscore the urgent need for policies that prioritise the welfare of citizens and foster sustainable development.

Source: Govima