Labour Unions Reject New Electricity Tariff Proposal
The proposed increase in electricity tariffs by the Federal Government has sparked strong reactions from small business owners and civil society organisations (CSOs), who argue that there is no justification for further hikes. The government, through the Minister of Power, Chief Adebayo Adelabu, revealed plans to adjust tariffs for customers outside the Band-A category as part of efforts to address liquidity challenges in the Nigerian Electricity Supply Industry (NESI).
Speaking at the unveiling of the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan (NIRP) in Abuja, Chief Adelabu stated that the government could no longer sustain the N3 trillion subsidy on electricity. He highlighted that the debt owed to power generation companies (GenCos) has surged to N4 trillion, making the current system unsustainable.
“The key issue in the market is illiquidity, and we will continue focusing on sector reforms. We will reassess the tariff to find ways to improve revenue generation and attract more investment to rehabilitate decaying infrastructure,” Adelabu explained.
The disparity between Band-B and Band-A customers, with Band-B customers receiving around 18 hours of electricity daily at a rate of N63/kW, has raised concerns. The government hopes that these policy frameworks will help stabilise the sector, enhance the power supply to small and medium-sized enterprises (SMEs), and foster economic growth.
The Nigerian government anticipates investing $29.23 billion in the power sector by 2035, with total investments reaching $122 billion by 2045. Strengthening the national grid is also a key priority, given that 60% of manufacturers currently rely on self-generation due to the grid’s instability.
However, the proposed tariff adjustment has met stiff resistance from business owners and economic stakeholders. The President of the Association of Small Business Owners of Nigeria (ASBON), Dr. Femi Egbesola, warned that any additional increase in electricity costs could force many SMEs to shut down.
“Most SMEs rely on government-supplied electricity. Any hike in tariffs will escalate inflation, increase production costs, and lead to business closures, especially among micro and small enterprises,” Egbesola stated.
CSOs have also strongly opposed the proposed tariff hike. The Education Rights Campaign (ERC) emphasised that any increase in electricity rates would trigger mass resistance from Nigerians. ERC’s National Coordinator, Hassan Taiwo, argued that since power supply remains unreliable, the government has no moral justification for a tariff increase.
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“Nigerians continue to endure power outages, and the national grid collapses almost every other month. It is unacceptable to ask people to pay more for a service that remains subpar,” Taiwo said. He also pointed out that high electricity costs are burdening citizens and forcing companies to shut down, with public institutions such as the University College Hospital (UCH), Ibadan, struggling to afford their electricity bills.
Similarly, the Movement for Socialist Alternative (MSA) described the proposed increase as a means for private energy investors to make profits while doing little to improve power generation. MSA’s General Secretary, Dagga Tolar, accused the government of implementing a “divide and conquer” strategy by making Band-A customers believe they receive superior service, while the majority of consumers continue to suffer from erratic power supply.
“The government has failed to improve the grid’s reliability, yet it continues to push for tariff hikes. What we need is a reversal of electricity privatisation and a return to public ownership, managed democratically by workers and consumers,” Tolar stated.
The Nigerian Labour Congress (NLC) and Trade Union Congress (TUC) have also been urged to take action against the tariff hike. MSA called for a 24-hour warning strike and an urgent review of the national minimum wage to reflect the country’s inflation rate, which currently stands at 34%.
Amid these tensions, the Nigerian Electricity Regulatory Commission (NERC) has introduced a Customer Bill of Rights to enhance consumer protection and service delivery within NESI. According to NERC, customers are entitled to transparent information on electricity rates, fair billing, and the right to report unauthorised tampering with their meters. The commission has also advised customers to notify their distribution companies when moving in or out of a property to prevent disputes over outstanding bills.
As the debate over electricity tariffs intensifies, many Nigerians remain sceptical about the government’s commitment to addressing the fundamental issues plaguing the power sector. While the government insists that tariff adjustments are necessary for financial sustainability, businesses and citizens continue to call for improved service delivery before any price increase is considered. With resistance mounting, the coming weeks may see further advocacy and potential industrial action against the proposed hike.
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