Nigerians still paying exploitative tariff for darkness

Abdullahi Bilal

Ten years after the privatization of the Power Sector in Nigeria, One can say categorically that darkness and despair have dotted the nation’s power sector more than ever before. The sector has been engulfed with a series of unending collapse in the national grid. Between Sept. and Dec. 2023, the national grid system collapsed thrice, leading to a crash in power generation.

Despite the astonishing amount of money invested in the Power Sector, The Country continues to grapple with significant electricity shortages and frequent blackouts, which have hindered economic growth, impacted negatively on social development, and constrained the overall well-being of the mass of working people. “Between the three-year period of 2020 and 2022, the budget for the power sector grew by 129.42 percent, rising from N133.479 billion in 2020 to N306.23 billion in 2022″( and to N344 billion in the 2024 budget.

The Power privatization in Nigeria has led to regressive tariffs which translates to exploitatively higher rate of billing on ordinary citizens, particularly low-income households. This has further exacerbated inequality, as the cost of electricity has become less affordable for a large majority of the working class people in Nigeria. It is important to note that the anti-poor billing and epileptic power supply are manifestations of a deeper crisis of the neoliberal capitalism.

The fundamental crisis in the electricity sector as with all the leading sectors of the economy is orchestrated by the ruling elites who run the greedy system of capitalism to serve their interests, often to the detriment of the vast working-class majority. The excuse for privatisation of the sector was that the power holdings company was inefficiently run as a public corporation. But, the situation ten years after privatisation is no better; in fact, things have moved from terribly bad to horrendously worse. Even the richest of the bosses, Mr Aliko Dangote, drew attention to this, as he pointed out that it took Egypt just eighteen months to increase its electricity by 10,000 megawatts. Meanwhile, even under private entrepreneurs and despite the federal government’s N1.02 trillion bailout to these bosses who now own generation and distribution of power, the average generation is just 4,000 megawatts.

There is thus absolutely no basis for saying private provision of electricity is better. the score card on the ground reads otherwise, except for the fact that it has been employed as a milking cow to further enriched the pockets of those bosses who own the distribution companies (DISCOs) and generating companies (GENCOs), which include several former heads of state and other political figures who enriched themselves in the first place by stealing from the national purse when they were in government.

Estimated billing is one of the ways they skin the working Masses dry, without even delivering the much-needed electricity. Electricity tariffs are already sky-high, even with prepaid meters. But with estimated billing, prices are further bloated since the estimated billings do not take into account the long hours and days when electricity is not supplied. 

It is a shame that in a country with over 210 million inhabitants, less than 5 million “customers” have prepaid meters. The cost of a prepaid meter ranges from N81,975.16k for a single phase to N109,684.36k for three-phase meters. Meanwhile, the subsisting minimum wage is just N30,000, and some states still owe civil Servants 5-10 months’ salaries, excluding those in the informal sector.

Therefore, it is virtually impossible for a poor working-class family, which would still have to pay house rent and skyrocketed transport fares occasioned by the removal of Fuel subsidy, to afford one and avoid starving for some months. If that were not bad enough, they would be expected to pay an electricity meter charge.

The current state of the power sector in Nigeria since its privatization a decade ago is characterised by tariff subsidy, which itself is a conduit pipe to further syphoned public wealth into the pockets of the privileged few. According to a report by the NERC, the Federal government between January and September 2023 alone has spent N375.8bn on electricity subsidy as power consumers. For the same period, especially the poor has paid a total of  N782.6bn for the commodity during the same period despite total blackout in almost every part of the country.

The subsidy itself benefits the members of the billionaires club, and relatively rich people as more rich people are connected and consume more electricity, according to the Nigerian Electricity Regulatory Commission. According to the 2022 Market Competition Report newly released by the NERC, 79 percent of the richest group and 68 percent of the high-income group are connected as compared to the poorest and low-income groups with 21 percent and 41 percent connection rates, indicating that more top-income groups are connected than low-income groups.

It was estimated by the World Bank (2021) that 59.5 percent of the distribution of the tariff subsidy goes to the richest 20 percent of the households, while only 1.5 percent benefits the poorest 20 percent. Meanwhile, in comparison of end-user electricity tariffs in the Economies of West African States member countries, NERC revealed that the average electricity tariff in Nigeria in 2021 was US$0.14/kWh and was relatively lower than the average electricity tariff in most ECOWAS countries. It however fails to take into reckoning the fact that the working class in Nigeria earn far much lower wage compared to workers in these ECOWAS countries, and within that context the working masses are expliotatively pay a higher percentage of their for electrictiy.

The NERC said the relatively low electricity tariff in Nigeria was partly due to the tariff subsidy provided by the Federal Government and the relatively cheaper gas price to the power sector in Nigeria. End-user tariff subsidy in Nigeria is pro-rich as top-income group consumes more electricity than low-income group, thereby benefiting more from subsidy than the lower income earners,” the report added. The end-user tariffs vary by each Disco and depict a general increase between 2019-2022.   


There can no other way forward than ending the domination of private capital over the electricity sector and indeed all major sectors of the economy. Capitalism places prime purpose on profit making in managing essential public services; the only alternative, however, is the nationalization of the power sector and other heights of the economy, placing them under the democratic management and control of workers. This ultimately means that the power sector should be brought under democratic public ownership and control. This would involve working masses taking ownership of power generation, transmission and distribution companies, ensuring that the interest of the mass of working people is a priority over profit-making motives

We in the MSA are also calling for the democratization of decision-making in the power sector, which means that workers, consumers and local communities will have the right to elect representatives from, among themselves in the management of the sector at all levels. This could be achieved through the establishment of workers councils, consumer representatives and community participation in decision-making processes, allowing for more inclusive and equitable Power management, but all these could be mere wishes, if the mass of the Working people do not organize themselves in an independent political organisation around the banner of a Socialist Alternative programme with which to contend with the pro-rich political parties to win power from their grip and by so doing overthrow the existing exploitative capitalist system that has continued to milk dry every penny from the purse of the Working Masses with their obnoxious neo-liberal economic policies to further satiate the greed of the members of Billionaires club and Capitalist ruling elites.

This again has placed a historical responsibility before the leadership of the various labour unions to provide leadership to the mass of the working people in ensuring that they arrived at the necessary Socialist consciousness that will enable them to seize history and come to the arena of Struggle against the ruling elites and take up their historical destiny of overthrowing capitalism and begin a socialist construction of society that will nationalize the commanding heights of the economy and democratically placed under the control and management of workers, This is the only way out that will guarantee a better life of the entirety of the Mass of the working People.