The federal government, this month, has given Nigerians, already reeling under the pains of the global Covid-19 pandemic, a double Greek gift, in the form of power (electricity) and energy (petrol) price hikes. The former is a hefty 100% increase and the latter 61%. These tariff increases will erode what palliatives the government claims to be providing for the very poor to cushion the crushing so-economic fallout of the pandemic.
President Muhammadu Buhari has said the increases have his blessing. Speaking during the First Year Ministerial Performance Review Retreat held Sept. 7 at the Conference Centre of the State House, Abuja, he said the COVID-19 pandemic, which has affected economies globally, compelled his administration to make “some necessary far-reaching adjustments for long-term gains with some initial pain.”
Buhari, who listed negative consequences if government should resume the business of fixing or subsidizing PMS (petrol) prices, said it would mean a return to the costly subsidy regime with the potential return of fuel queues.
“There has been some concern expressed about the timing of these two necessary adjustments. It is important to stress that it is a mere coincidence in the sense that the deregulation of PMS prices happened quite some time ago; it was announced on 18 March 2020 and the price moderation that took place at the beginning of this month was just part of the on-going monthly adjustments to global crude oil prices. Similarly, the review of service-based electricity tariffs was scheduled to start at the beginning of July but was put on hold to enable further studies and proper arrangements to be made.”
One of the “arrangements” was for most Nigerians to be given meters by licensed distribution companies. We know for a fact that this was not done as of Sept. 1 when government approved the new tariff regime. It is a clear concession to the Dicos that have been demanding the price raise for a long time.
This concession, unfortunately, created a problem for the government. It failed to consult other stakeholders in the industry, labour especially. Threats of a nationwide workers strike have now forced the government’s hand to call a meeting with Nigeria Labour Congress (NLC) this week. A belated move.
Speaking with reporters after a meeting with President Buhari at the State House, the Minister of Labour and Employment, Dr. Chris Ngige, said the government would show its entire records of finance to the organised labour. He said the government would explain its challenges to the labour bodies and listen to their grievances. According to him, all institutions handling the finances of the government, the Nigeria Labour Congress (NLC), Trade Union Congress (TUC) and their affiliates would be at the meeting.
“The president has approved for us to have a bigger government side-meeting with the organised private sector; all the government institutions that have to do with the finances of government will be there so that we meet with them and show them the books. The electricity tariff, as you know, the electricity regulatory commission approved the increase based on certain electricity bands R1 and R2 and even in the R2 band, you have soft bands so that we can protect the rural poor and people who are in the suburbs. So, we are going to look at them holistically because we want a stable labour industrial union in the country. The president has been briefed and he is in tune and has given the support to talk to everybody we need to talk to.”
All this dogon turanci (big grammar) would not have been necessary if wide consultations had taken place before announcing the tariff increases. Now what government is doing is how best to manage the damage already done. And we know, from experience, it doesn’t have very good crisis managers.