El-Rufai: Electricity Tariff Needs to Go Up 400%

By Patrick Ugeh

25 Mar 2011


Former Director-General of Bureau of Public Enterprise (BPE) and former Minister of the Federal Capital Territory (FCT), Mallam Nasir el-Rufai, has said for the country to be able to attract investors into the power sector, electricity tariffs need to go up by between 300 and 400 per cent.

El-Rufai said for the country to move forward in the provision of electricity to its populace, the National Electricity Regulatory Commission (NERC) must do that which was needful by having the courage to increase the tariff irrespective of how politically incorrect it might be.

According to him, this was imperative because even if all of the oil revenues in the country were ploughed into the power sector alone, it would not be sufficient to provide its needs of that sector.

He said the only alternative was to attract foreign direct investment, which would not come unless the tariff was eye-catching enough to entice them.


El-Rufai, who spoke at the first Distinguished Visitors’ Programme organised by NERC in Abuja Thursday, also said the power sector was capable of fetching 10 times the $200 billion realised so far from the telecommunications sector and the $2 billion it realised from licensing.

The first Distinguished Visitors’ Programme had as its theme, “Electricity on Demand.”
“Your success will lay the foundation for electricity in this country,” el-Rufai told NERC. “If you get it right, electricity will be the next big thing in Nigeria.”

He lamented that the electricity situation in Nigeria was worse now than it was in 1999, and noted that the way the Chairman of the regulatory body, Dr. Sam Amadi, handled it would determine the future of the country.
The former minister of the FCT, however, stated that no foreign investor would come to the country unless the issue of insecurity in the country was addressed.

“Right now, nobody will come because the perception outside is that Nigeria is a land of killings, a land of kidnappings,” he said. “Security must be provided. We must make this country safer.”

Cautioning that the Nigerian public service had a way of trying to make the officials not to perform, el-Rufai counselled the NERC helmsman to see that the work got done as doing so was far more important than any other consideration. 

He advised him to identify directors within his organisation that were not ready for change and fire them, even if it meant getting the law amended, and reward those that were ready to move with the tide of change.

He asked Amadi to draw inspiration from his unilateral abolition of the Ministry of the FCT by convincing then-President Olusegun Obasanjo that it was an encumbrance, adding that what was essential was for the principal to believe in him.

El-Rufai noted that to have the needed courage to do that which is right, the chief executives of public institutions like NERC should have something to fall back on, pointing out that he was able to have his way with Obasanjo because the former president knew that he could quit the job at any moment.

He said the former leader knew that it would have been more dangerous for him to leave in controversial circumstances as he would then have gone public with much unsavoury information.

“Those in charge knew we didn’t need the job, hence the leaders couldn’t dispose of us easily,” he said. “They treat people badly when they know you have nowhere else to go. I didn’t care who I hurt in the process of enforcing the Abuja master plan. You must be in a position where you can say I will walk away.”

However, Amadi appeared to differ from el-Rufai’s approach to tariff increase as he explained that there was need to build legitimacy for the process through enlightenment.

He lamented the “tragedy in Africa that we don't bring leaders back to reflect on their experiences. So they litter the landscape”.
Amadi stressed the need not to discard “our best”, which he said informed the decision to get el-Rufai to speak on the topic, “Leadership and Change Management.”

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