Wednesday, February 28, 2024
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Why electricity tariff hike was opposed – ICAN

The President of the Institute of Chartered Accountants of Nigeria, Dr Innocent Okwuosa, has disclosed that the body opposed the hike in electricity tariff last year because it coincided with the removal of fuel subsidy and exchange rate harmonisation, which led to a devaluation of local currency.

Okwuosa stated this when he led the ICAN delegation to pay a courtesy visit to the Managing Director/Chief Executive Officer, Eko Electricity Distribution Company, Dr Tinuade Sanda.

He said, “When in July 2023, the DisCos moved to increase the electricity tariff, the institute advised against this move. It was not because we were not aware of the challenges facing the DisCos. It was because of our public mandate interest. We are aware that the goal of SDG 7 is to ensure access to clean and affordable energy by all citizens.

“There is no way SDG 7 can be achieved with the proposed hike in electricity tariff which came at the same time that government removed fuel subsidy and unified exchange rates that (led) to a massive devaluation in the value of naira.”

President Bola Tinubu in his inaugural speech revealed that subsidy was gone, which immediately shot up fuel prices across the country.

About two weeks later, the Central Bank of Nigeria announced the harmonisation of the segments of the foreign exchange market.

The institute highlighted the various multifaceted challenges confronting electricity distribution in Nigeria, ranging from outdated transmission and distribution networks, resulting in energy distribution losses; and inconsistent and sometimes conflicting regulatory policies, among others.

It urged the government to implement policies that would enable Nigeria to achieve the SDGs 1 to 10.

Quoting the World Bank’s report that 85 million Nigerians do not have access to electricity, Okwuosa noted that the lack of reliable power had constituted a significant constraint for citizens and businesses, resulting in annual economic losses estimated at $26.2bn (N10.1tn).

He added it had become essential to create a conducive environment that would attract investment to the power sector by establishing and implementing clear and consistent policies and creating the right incentives.

“To this end, we commend the recent power sector stakeholders’ engagement organised by the Minister of Power Mr Adebayo Adelabu, as a step in the right direction. However, we advise that in the future, invitations should be extended to professional bodies like ICAN which has a Technical Committee on Power Sector.”

In June 2023, some DisCos, in a note to their customers, informed them of an increase in electricity tariff effective July 1.

The DiCos had suggested that the tariff increase was in response to the devaluation of the naira.

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