NEWS that a new electricity tariff will soon be announced is clearly an attempt to put the cart of the much touted power sector reform before the horse of improved electricity supply in the country.

Chairman of the National Electricity Regulatory Commission (NERC), Dr. Sam Amadi, confirmed the imminent increase in tariff, even when most consumers of power are still waiting for increased power, which would encourage them to more eagerly pay any reasonable new tariffs.

After years of literally living in darkness, what Nigerians are looking forward to, as a result of the promised reforms, is efficient and regular power supply not higher tariffs.

Amadi, who gave the hint when he paid a visit to a media house in Lagos recently, said his Commission has already commenced the process that would culminate in electricity tariff increase, adding that the new regime would be made public soon.

Based on this statement and similar policy positions that have been made public previously by various officials since the commencement of the on-going power reform programme of the President Goodluck Jonathan administration, it is obvious that tariff increase has been projected as a pre-requisite for the success of the proposed reform programme. The argument has been that investors may not be interested in the nation's power sector as long as the tariff remains as low as it is presently.

Over the years, Nigerian governments have been laying claims to subsidizing electricity, though most consumers have consistently complained of irregular supply of power, total darkness in some areas, unfair billing and such like. A report, for example, claims that the Federal Government subsidized power with about N177 billion in 2009 alone. It said that Nigerian consumers currently pay about N6 per kilowatt of electricity instead of about N11 projected as the unit cost of the product.

While we do not deny the fact that full commercialization of the power sector, through the unbundling of the Power Holding Company of Nigeria (PHCN), would eventually lead to payment of higher rates for electricity, we wonder how the introduction of new rates now, when the expected improved services have not yet been achieved can be justified.

We, therefore, advice NERC and all the other agencies involved in the electricity reform process to borrow from the example of the transformation of the telecommunications sector in Nigeria.

When Nigerians depended solely on NITEL, they suffered so much of poor services that even the subsidized rate they were paying was a burden. Very few privileged people had access to telephone services then, which was still very inefficient. But when NITEL's monopoly was broken and private operators took over, providing far better services, Nigerians eagerly paid the higher tariffs they charged.

Since then, telephone tariffs in the country, comparatively, have remained one of the highest in the world; yet, Nigerians are appreciative of the services.

The point being made is that Nigerians are ready to pay for quality services.

So, we find it hard to accept the argument that tariff has to be increased before investors show interest in a business that offers so much potential.

Power is a critical need in Nigeria and therefore an obvious gold mine. Any serious investor should be willing to invest in the sector first before reaping the profits that are literally guaranteed.

We, therefore, counsel against the moves to increase tariff now and urge would-be investors to bring in the right equipment, provide power and thereafter name a reasonable price for it.

Before the introduction of the new tariff, we suggest that the unbundling of PHCN should proceed to its logical conclusion as quickly as possible.

Nobody needs to be told that the entire nation is waiting for power for the expected rapid development of the country.

The industrial sector in particular, which has become comatose, is waiting for power since many large and small scale industries have folded up or relocated to neighbouring countries, primarily due to lack of electricity.

Also, other critical sectors of the economy and social life, which depend on regular supply of electricity, have remained seriously hampered as a result of poor supply of electricity.

What the country, therefore, urgently needs are, serious investors not asset strippers or brief case businessmen, charlatans or fraudsters out to dribble Nigerians or loot the treasury through the back door as happened in the past concerning NITEL.

When such investors come, they are likely to do first things first and these include shedding excess weight, replacing out-dated infrastructure with modern facilities, ensuring sufficient generation of electricity and putting in place an efficient distribution network.

Once these and other fundamental measures are taken and Nigerians are offered regular electricity, the demand for an appropriate price for power will even be warmly welcomed by an appreciative populace.

http://allafrica.com/stories/201101311222.html

The editorialist unfortunately doesn't seem to see that the subsidy needs to be removed BEFORE people will want to invest money.

NERC has the right of it.

I could have sworn that just 2 weeks ago the NERC told Nigerians not to worry about any increase in tariff.