Nigerians will pay much higher tariff for power in 2021, going by promises made by the Federal Government to the International Monetary Fund while seeking the $3.4bn emergency financial assistance recently approved for Nigeria.

The Executive Board of the IMF approved the Rapid Financing Instrument, which the Federal Government plans to use to address the economic impact of the COVID-19 pandemic in the country, on April 28.

A Letter of Intent, jointly signed by the Finance Minister, Zainab Ahmed, and the Governor of Central Bank of Nigeria, Godwin Emefiele, and addressed to the IMF Managing Director, Kristalina Georgieva, indicated that the Federal Government made a number of promises to the fund in order to secure the financial assistance.

One of the promises, or commitments, which the government made in a bid to assure the executive board of the IMF of its readiness to reposition the Nigerian economy after the pandemic, is that Nigerians would pay full cost-reflective tariff for power in 2021.

The Federal Government also told the IMF it intends to cap electricity tariff shortfalls to N380bn in 2020.

“We are also advancing in our power sector reforms – with technical assistance and financial support from the World Bank – including through capping electricity tariff shortfalls this year to N380bn and moving to full cost-reflective tariffs in 2021,” the Federal Government said in the letter.

On January 4, the Nigerian Electricity Regulatory Commission approved an increase in electricity tariff for the 11 electricity distribution companies in Nigeria.

It, however, could not implement the tariff increase after labour unions, lawmakers and other Nigerians kicked against the move, which would have commenced on April 1, 2020.

Although the NERC-reviewed tariff was not cost-reflective enough as required by power distributors, it showed that Nigerians would definitely pay more for electricity if it had been implemented.

This, therefore, implies that once the government enforces the payment of full cost-reflective tariff, in line with the promise to the IMF, power users might pay far higher than what was projected in NERC’s recent tariff review.

The commission had explained that its directive on the January 2020 tariff regime for different Discos superseded the earlier one issued on the subject matter.

According to details of the review published by the commission in January, for the Abuja Electricity Distribution Company, residential customers in R3 category who were paying N27.20 per unit would have been paying N47.09, had the regime started on April 1, 2020.The customers would have paid N19.89 more per unit.

The NERC review also showed that for Ikeja Electricity Distribution Company, customers on the R3 category who were paying N26.50 per unit would have paid N36.92 per unit from April 1.The new rate amounted to an additional N10.02 per unit.

In the same vein, going by the NERC’s stalled tariff plan, Enugu Electricity Distribution Company residential (R3) customers who were paying N27.11 per unit in 2015 would have paid N48.12 per unit from April 1, 2020.The new rates were, however, put on hold after customers kicked vehemently against the development.

But going by the Federal Government’s promise to the IMF, an implementation of cost-reflective tariffs in 2021 means that Nigerians would pay even much higher for power than the rates which NERC had planned to charge from April 1.

Also, in the Letter of Intent, which was dated April 21, the Federal Government also hinted at further increment in Value Added Tax as part of plan to increase its revenue to 15 per cent of Gross Domestic Product.The planned revenue drive also includes hike of excise fees and removal of tax exemptions.

“First and foremost, we will revert to our government’s planned medium-term fiscal consolidation path – which includes increasing revenue to 15 per cent of GDP through further VAT reforms, rise in excises, and removal of tax exemptions – once the crisis passes,” the letter said.

The Federal Government also assured the IMF that it was working to reduce its budget deficit to under three per cent of GDP in line with the Fiscal Responsibility Act.

The Federal Government also assured the fund that it was committed to eliminating recourse to central bank financing of budget deficits by 2025.

https://punchng.com/nigeriansll-pay-higher-electricity-tariffs-fg-promises-imf/?amp=1&__twitter_impression=true

Lalasticlala

well its not a bad idea as it will help our economy restart

Next Level in progress........

Why do IMF dictate to African countries but wouldn't do the same to develop countries. Is it that we cannot decide for ourselves model that will work base on our circumstances or we are weak.
Abacha comes to mind in this kind of nonsense.

Buhari is selling Nigerians to the highest bidder.

Buhari the sinzu master.

What other conditions are we yet to find out?

JAOS:
.

I hope every igbo man can see the evil in Nigeria. The south east to pay more than every other region in Nigeria. Most surprisingly, paying more than Abuja and ikeja. It is well.

So As To Raise Enough Fund To Pay Back The Loans, Good One

okay

Bubu the mumu at it again.

The first of all lied shamelessly to Nigerians that the IMF alleged grant but now confirmed loan have no conditions attached.

Today, they also lied to the IMF that electricity tariffs will be increase-to invest in the epileptic power sector or recoup the loan for IMF? They have so much taken Nigerians for granted.So what other condition did they promised the IMF?

SInce inception, every policy of this government is to over burdened the masses, nothing good to offer than pains. Common palliatives that other countries gave citizens without agitation, Nigeria can't.

Imagine making ridiculous promises just to get loans that no ordinary citizen will benefit.

While d FG keep denying it's not a repayable loan. Everything built on falsehood and propaganda definitely crumble. FG wants to set up d masses b4 d IMF as if we are d problem whereas d truth is dat d masses receive insufficient power supply across d homes. Common prepaid meter scheme is still not successful cos they prefer estimated bills

bamvik:
So As To Raise Enough Fund To Pay Back The Loans, Good One

Yes, good one but the region with negligible allocation of the loan will pay higher.
Hope our senators and governors that have refused to speak up are seeing the injustice.

Lol... What happens to Abacha's repatriated loots?

Flyingngel:
Why do IMF dictate to African countries but wouldn't do the same to develop countries. Is it that we cannot decide for ourselves model that will work base on our circumstances or we are weak.
Abacha comes to mind in this kind of nonsense.

Do begger(borrower) have a choice? Had it been there's other option, such won't happen.

Very soon we would start kidnapping IMF staffs with all this Economic Hit Man policies they are given Mr President to keep us poor.

The promised change is here.

May God Almighty punish Buhari and his Yoruba muslim supporters

sapientia:
The promised change is here.

This is pure enslavement.Imagine mortgaging your country's wellbeing for an outrageous loan of the IMF kind.Now what become of Abacha loot & all their phantom revenue generation?

They borrowed money used the money for themselves still expect us to pay the money what kind of injustice is this

In 21st century nigerians still want govt to be subsidizing power. Average household in Nigeria is owing 100k electricity bills.

If u want steady light relocate to western
countries and be ready to pay outrageous electricity bills after sacrificing half of your earnings for personal income tax

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LivingSage:
[b]
Do begger(borrower) have a choice? Had it been there's other option, such won't happen.

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