Interview

No Formal Complain About Electricity Tariff Increase – NERC Boss

Published

10 years ago

March 1, 2016

Since the announcement of a new electricity tariff, which came into effect from February 1, this year, both the Nigerian Labour Congress(NLC), Civil Society Groups, as well as the country’s legislative arm of the Nigerian government have all protested and condemned the increase, the labour and civil society groups on their part, took to the street in protest, which also saw them picketing some of the electricity distribution companies, which the federal legislature on its part out rightly called for an immediate reversal of the tariff, back to its original rate, several commentators have also argued against the new tariff regime, insisting it wasn’t fair and sensitive to the reality as well as the plight of the Nigerian consumers. However, while the controversy rages on, the industry Regulator-In- Chief, acting Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Anthony Akah, in this interview with nationalTRAIL correspondent, Shola AKINGBOYE, said that the recent nationwide protest organised by the Labour, Civil groups and several others was uncalled for. The regulator also called on workers’ union to avail itself of the well established channel at the commission in addressing their grievances. He insist that as far as the commission is concerned, on one has made a submission as required by its Act in respect of the tariff increased, just as he also said that the less privileged in the society were not affected by the increased tariff. Excerpts:

The recent electricity Tariff increased is still fresh in the minds of Nigerians, particularly owing to the countrywide protest against it. Has your organization, the Nigeria Electricity Regulatory Commission (NERC) come to terms with the reality of what the Nigeria Labour Congress (NLC), and other civil society groups are asking for?
Well, we welcome some submissions from NLC and other interested groups in line with our regulations and the Act is that any aggrieved party is given the sixty days to file their protest before the commission and those areas will be looked into by the commission in the most passionate manner, and ensure that we come up with a most fair adjustment, if need be, or to sustain what we have, if we fill that is expedient. Therefore, we implore all Nigerians, agencies, or association to avail themselves that opportunity rather than going on public protest, this is certainly the most appropriate thing to do, and more effective.
What else would you have expected from labour unions in times like this?
There are avenue for any interested group to file submissions against the DISCOs and the GENCOs before the commission. We on our part, will then look into that, but we have to understand the fact that electricity is a product, just as we have any other tangible product in the market place. So, electricity is also affected by the changes in the micro-economic indices just as the foreign exchange rate, as well as the inflation rate. And the critical factor is in getting both the quality of power and the quantity of power that we are looking at, and to also give a market reflective tariff that will encourage investors going into the business. No investor will go into any venture that will not produce return on such investment, neither would any financial institution give you any loan if from day-1, there will not be a proof that there is going to be a return on the investment.
Is NERC speaking for the Discos?
At NERC, we are also mindful of the plight of the Nigerian electricity consumers, and to ensure that in the tariff order, strong consumer protection mechanisms are tied to that order. We also look forward to a constructive submission from members of the public, and see if there is need to make adjustments, but in the absence of that, we make use of the data at our disposal, covering the market in ensuring that the tariff we have is market reflective, in line with the reality on ground. What we need to do is to come up with initiative, and part of that initiative is cost reflective management, and energy efficiency drive.
How?
We as regulators have just consulted with Energy Commission of Nigeria (ECN), NESREA, NOA, as well as SON, so that Nigerians will have more efficient way of using power, and that will reduce their bill, as much as 35 percent, and thus increase access for more Nigerians on those energy they save. So we have the initiative that will help Nigerians deal with this.
Like….?
We have the Power Assistance Consumer Fund, as we are mandated under the Act to take care of the less privilege. As soon as wehave wrapped up the meter levering method, we should be able to get the minister to help us implement those framework. But most importantly, as Nigerians, we have to accept the fact that this is also a business, just as those individuals whohave adjusted their cost in reality of what is accruable to them in the market, so do this group of people. But as regulator, we make sure that the only tariffs that we approve are those tariffs that are strictly cost incurred based on prudency and are absolutely necessary for the production and the distribution of power.
You mentioned that you act when you get submissions, are you saying NERC does not act until it gets submissions from the public, and what action have you taken since the NLC tariff protests began?
Submissions should be based on fact; the tariff order is there on NERC website for all to see, and we are available to continue to give clarifications where need be. And you can only say that the inflation rate is this, and we use the wrong inflation rate, not in criticising the tariff structure. So, based on that critical condition, we can now make informed decisions. But when you make a protest and you don’t submit in concrete and clear terms, it becomes difficult to make any informed judgment. For example, last year we got submissions and representations from Manufacturers Association of Nigeria (MAN), and we took a decision that lets zero down the collection loss; though we realise that it wasn’t the best decision that should have been taken at that circumstance. The regulation time is not yet filed out, we are given sixty days to submit.For example, saying line A under the old tariff,‘we feel it should be this, because of these factors;but we have not gotten such from NLC, but we are still hoping to get that within the sixty days window.
Does that means that something can still be done by NERC on this matter?
We are open to continue to engage them, and we are confident that base on the reality, and the fact before us.For example, foreign exchange is now going for as far as 318 Naira to a Dollar, and every producer is adjusting his cost; the inflation rate on cost of gas is there, it does not gives incentive to the cost of producing gas, and under this tariff, we have adjusted it to the reality of the market cost of gas, which is $3/30cent plus a willing charge of 80 cent, so such adjustment is certainly going to affects the tariff. So let’s face the reality and see what we can do within the circumstance to build a more vibrant economy through a vibrant and productive power sector. We cannot continue to pretend that electricity is not a product, for as long as you continue to see electricity as a social commodity that is free, so long that we are pretending that the sector is not dyeing; the sector is dying.But we as regulator, consumer interest must be protected while the distribution companies must adhere to their performance agreements, and we have given them a market reflective tariff and so, no excuse whatsoever for them not to do what they have to do in order to give Nigerians value for money. Though, they also have expressed concern that we gave them five years period to do that based on the performance agreement, we are now saying that we give you an order of one year with their submitted concern to us, and in sixty days, we are going to look into it. We are not looking at anywhere that is more than two year time-frame.
But what is NERC doing against the Discos on the question of metering gap that current exist in the system?
The distribution companies on their own are delighted and more eager to meter Nigerians, because there is a factor that is in-built in the tariff order; that factor means that Nigerians have power.For example, if you are a metered customer and you are given a bill that you feel is unrealistic, you know you are not going to pay it until that particular time that the bill under dispute is resolved, so you only pay the bill that you last agree to pay. What that means is that the distribution companies now have a trigger to work so hard to meter the whole Nigerians, rapidly as much as possible, simply, because they won’t have more Nigerians protesting on their bills. So, we have done the right regulatory framework to protect Nigerians. And it is important that I plead that everyone should understand that the less privilege Nigerians are not affected by this tariff. The R1 Customers tariff still remains at four naira as of last year. It is not correct for them to be saying that the poor are going to be made poorer. Two, the tariff order takes care of the poor, the R1 as I said is still at four naira, the tariff mechanism is a cross subsidy mechanism, where some of us who are more affluent should bear more of the burden, not our less privileged among us.
What happen to other class of consumers under this tariff regime?
The R2 Class has a little bit increase tariff, we have the commercial class, which eventual will pass through the cross to help the poor, but the poor are more protected on this tariff. The poor also have a mechanism for the window on the long run to be protected through the Power Assistant Consumer Fund. The commission is working so hard to come up with it. We want every Nigerian to understand that for the first time, we have got good market reflective tariff that will trigger the much desire growth in the industry and also trigger a better quality of life. There is no need coming out in public protest, when you do public protest, you heighten the polity, it is unnecessary, instead, explore opportunities that are available at the commission to achieve a better result.

Interview

INTERVIEW:Tinubu’s Tax Reform Bills Are The Best For Nigeria Now-Mikko

Published

10 months ago

December 7, 2024

Our Reporter

Honorable Bernard Mikko, a former member of the House of Representatives from Ogoni, Rivers State from 1999-2003 spoke to ourcorrespondent the merits of the Federal Governments fiscal and economic policies, especially the controversies surrounding the tax reform bills.
Excerpts:

The Federal Government has introduced far reaching economic reforms, the latest being the four tax reform bills, which seems to be generating controversies, what is your take on the fiscal and economic policies of the Tinubu administration generally?

(1)The Federal Government is an APC government that succeeded itself. From President Muhammadu Buhari to President Ahmed Bola Tinubu. They both campaigned on the change mantra, and the president vowed to continue from where his predecessor stopped. After sixteen years of the PDP administration, Nigerians were desperately in the mood for change. Including the change of economic, social, and political well-being of the people. The APC touted itself as that agent of change. Politics and political leadership set economic renewals and growth, even as the former dwindles, while the latter will still be subsisting. Change, they say, is inevitable in an active society. The tax reform bill is a major policy instrument for socio-economic change. It defines the essence of commitment to our unity, political development, and economic growth. As you know change anywhere in the world comes with innitial pains, apprehension and fear, it creates anxiety and generates controversies, sometimes founded on primordial identities and filial pieties and cleavages, particularly in diverse and multi racial societies like Nigeria. Interestingly, controversy is the nature of politics, and expectedly so in Nigeria, with the introduction of the four tax reform bills as a measure of the fiscal policy of the new administration of President Ahmed Bola Tinubu

Let us talk about the tax reform bills in particular. Would you say they are timely, given the socio- economic realities of the country?
(2) Nigeria inherited a colonial administration based imperial adventure and exploitation. Economic development and social welfare weren’t on the agenda of the colonial regime. Since 1933, there hasn’t been any major tax reform or fiscal policy that will put Nigeria on the path of economic growth and development. So, the reform isn’t only timely but long overdue. With hindsight, there could be no other time than now as time waits for no one. Anytime is God’s time.
But some sections of the country expressed reservations about the bills, alleging that they were targeted to estrange them. Taking a critical look at the bills, is it possible that any one of them may tend to target a particular section of the country?
(3) The so-called reservations expressed by some sections of the country are generally a symptom of the geopolitical nature of our country. Anytime the political leadership of the country is from one section, the opposite section appears to be nervous, sometimes in mischief. Looking at the gradients of the bills, I would say that the economy and the general well-being of the people are the target. But looking critically at the data from NBS provided by the Chairman of the Tax reform committee, Lagos and Rivers states appear to be on losing side, falling from over 80% threshold in the current tax regime to less than 15% in the envisaged fiscal policy administration. This is one of the sacrifices we have to make as a nation going forward, to be our brothers’ keeper in time of need and support.
The Senate had earlier passed the bills for second reading, only to suddenly turn around and set up a committee that will study the bills’ advice on their desirablility or not. As a former lawmaker, would you say the manner with which the bills are being handled are procedurally correct?

(4) The suspension of legislative action on bills by the Senate is strange, authoritarian, and undemocratic. In civilised parliamentary debates, critical stakeholders will be encouraged to present their views , which would enable parliamentary committees to reach a near consensus or cause a vote on clause by clause basis. The Senate presiding officer acted in error by suspending further legislative action and abdicating her constitutional responsibility to the executive arm that formulated the bills and sent them to the National Assembly. In proper parliamentary procedures, once a bill is introduced and read for the second time, it can’t be suspended based on speculations or sentiments expressed outside the chambers but can be withdrawn by the president in consultation with the leadership of the National Assembly. As a politician with cognate parliamentary experience, if the Senate in particular or the National Assembly in general is unable to carry out their functions of law making and representation, let the bills be withdrawn for the executive to conduct a referendum on the desirability of taxation as a major policy item on exclusive list in our Constitution. In this context, states, principalities, and regional governments would be a position to determine their fiscal priorities based on their culture and socio-economic understanding.

Given the contro easy the bills seem to be generating, what would you suggest as the best approach to solving this serming quagmire?

(5) Political debates in most times ignite tensions and controversy. Stakeholders should engage in healthy debate with empirical data to support their claims. Without data and facts, it’ll amount to speculation and mischief. My suggestions are:
(a) allow full parliamentary debates without hindrance in the National Assembly.

(b) If the National Assembly is unwilling to continue deliberation on the bills timeously( as in the case of the Petroleum Industry Bill that lasted over 20 years in the the National Assembly), the bills should be withdrawn, and the issue of taxation presented directly to the Nigerian people through a referendum, not through our representatives in the National Assembly.

Some analysts feel that the general mood of the country could make President Bola Ahmed Tinibus re- election in 2027 suffer as a result of these bills in particular. Do you think that could be the case?

(6) The bait of possible scenarios in the next general election is highly speculative and apparently mischievous. It takes a committed and courageous leader to move a nation out of economic quagmire, and such decisions are unpopular and painful. Patriotic leaders make painful decisions and not smear campaigns that would be appreciated decades later. Our heritage and prosperity provide the foundation of our power, not docile followship, weak leadership, or a fragmented population.

Interview

Kekere-Ekun Appears Before Senate for Screening, Vows to Tackle Corruption

Published

1 year ago

September 25, 2024

milcah

The Acting Chief Justice of Nigeria (CJN), Honourable Justice Kudirat Kekere-Ekun, has vowed to implement a zero-tolerance policy against corruption in the judiciary. She emphasized her commitment to integrity and strict adherence to judicial ethics as fundamental aspects of her judicial philosophy.

During her screening before the Senate, Kekere-Ekun assured lawmakers that, if confirmed, she would prioritize the swift adjudication of cases, particularly election petitions. She promised to shield the judiciary from external influences and advocated for enhanced welfare and infrastructure for judicial officers.

Justice Kekere-Ekun also stressed the importance of strengthening national institutions and promoting responsible behavior during elections. She highlighted that these improvements could help reduce the tendency to challenge election results in court.

The Senate commenced the screening process for Honourable Justice Kudirat Kekere-Ekun for the position of Chief Justice of Nigeria on Wednesday. Prior to the screening, Senate Leader Senator Opeyemi Bamidele (APC, Ekiti Central) moved a motion to reorder the day’s agenda to prioritize her screening. The motion was seconded by Deputy Minority Leader Senator Oyewumi Olalere (PDP, Osun West).

Justice Kekere-Ekun, accompanied by justices from the Supreme Court and Court of Appeal, arrived at the Senate Chamber at 12:30 PM. Senator Basheer Lado, Special Adviser to the President on Senate Matters, led her into the chamber following the invocation of Order 12 of the Senate’s Standing Orders by Senator Bamidele, which was seconded by Senator Olalere.

On Tuesday, President Bola Tinubu submitted a letter to the Senate, seeking the confirmation of Honourable Justice Kudirat Kekere-Ekun as the Chief Justice of Nigeria. The letter, read by Senate President Godswill Akpabio, highlighted the President’s nomination in accordance with Section 231(1) of the 1999 Constitution of the Federal Republic of Nigeria (as amended), which mandates the President to appoint the CJN on the recommendation of the National Judicial Council (NJC) and subject to Senate confirmation.

The letter stated: “Pursuant to Section 231(1) of the 1999 Constitution of the Federal Republic of Nigeria (as amended), which gives the President the power to appoint the Chief Justice of Nigeria (CJN) on the recommendation of the National Judicial Council (NJC) and subject to confirmation by the Nigerian Senate, I have the honour to forward the nomination of Honourable Justice Kudirat Kekere-Ekun, CON, for confirmation as CJN. I hope that this request will receive the expeditious consideration of the Senate.”

Justice Kekere-Ekun was sworn in as the 23rd Chief Justice of Nigeria on August 23, 2024, by President Tinubu at the State House, Abuja. She is the second female to hold the position, following Justice Aloma Mariam Mukhtar (CJN from July 2012 to November 2014). Born on May 7, 1958, in London, United Kingdom, Justice Kekere-Ekun began her legal career at the University of Lagos, where she earned her law degree in 1980, and was called to the Nigerian Bar on July 10, 1981.

Interview

Inspiring Strategic Agility and Leading Successful Change

Published

1 year ago

August 15, 2024

milcah

Ambassador Charles Crawford, an Oxford and Harvard-trained British Diplomat and former British Ambassador to Bosnia and Poland, is renowned for inspiring leaders worldwide to navigate the complexities of geopolitics and volatility. His insights will be shared at the upcoming TEXEM UK Programme, “Strategic Agility and Inspiring Change: Fuelling Sustainable Success,” from August 26 to 29 at Hilton Liverpool.

Lessons from Diplomatic Experience
Drawing on his experience in post-communist Europe and post-conflict reconciliation, Crawford emphasizes that leaders must be adaptable in rapidly changing environments. Reflecting on the challenges faced during the dissolution of the Soviet Union, he advises against complacency, reminding business leaders that favorable market conditions may not last forever. His key lesson: optimism must be balanced with realism.

Leadership Strategies in Volatile Regions
Crawford highlights the importance of understanding both the opportunities and risks of leading in turbulent times. Leaders must be ambitious yet cautious, acknowledging that change initiatives often create winners and losers. He shares a poignant example from Serbia, where underestimating opposition led to tragic consequences. This lesson underscores the need for careful consideration of both allies and adversaries when leading change.

Strategic Agility in Business and Diplomacy
While diplomacy often emphasizes patience and method over agility, Crawford notes that taking smart risks is crucial in both fields. He challenges leaders to balance agility with caution, ensuring that quick decisions do not lead to unforeseen pitfalls. The TEXEM programme will delve into actionable strategies for embracing strategic agility in business, drawing parallels with diplomatic agility.

Communication and Leadership
Effective communication is central to inspiring change. Crawford, with his experience as a speechwriter for world leaders, underscores the importance of motivating followers through words. Leaders should focus not just on sharing information but also on challenging assumptions and encouraging new ways of thinking. Engaging speeches that provoke thought can be more impactful than those offering simple answers.

Learning from Historical Transitions
Crawford’s experiences during the fall of communism and apartheid offer valuable lessons for today’s leaders. He emphasizes the importance of trust and making hard choices in times of chaos. Through the TEXEM programme, participants will gain insights into how historical leaders navigated such challenges and how these lessons can be applied to modern corporate settings.

The programme promises to equip leaders with practical tools and fresh perspectives to navigate change and drive sustainable success.