Monday 28 September 2020

PRESS STATEMENT: ELECTION MONITOR CALLS ON ALL NIGERIANS TO SHUN PROTESTS AGAINST FUEL PRICE HIKE AND ELECTRICITY TARIFF REVIEW BUT ENCOURAGES LABOUR AND OTHER STAKEHOLDERS TO TAKE A SOLUTION BASED APPROACH

 



PRESS STATEMENT: ELECTION MONITOR CALLS ON ALL NIGERIANS TO SHUN PROTESTS AGAINST FUEL PRICE HIKE AND ELECTRICITY TARIFF REVIEW BUT ENCOURAGES LABOUR AND OTHER STAKEHOLDERS TO TAKE A SOLUTION BASED APPROACH

Monday 28th September, 2020

FOR IMMEDIATE RELEASE

Election Monitor is a Nigerian organization that is committed to the promotion of good governance. Election Monitor strongly believes that the planned nationwide industrial action by The Nigerian Labour Congress (NLC), Trade Union Congress (TUC) as well as other groups is not the solution to the fuel price hike and electricity tariff review recently introduced by The Federal Government of Nigeria.

Firstly, Election Monitor would like to cast the attention of Nigerians and other stakeholders to late 2011 and early 2012 when the then Federal Government attempted to remove the subsidy on premium motor spirit (PMS) or petrol. It would be recalled that protests lasted several days. Clearly hindsight indicates that the action of the Federal Government at the time was the right action as a result of the endemic corruption in the subsidy scheme as well as its unsustainability for the country. However, nationwide protests were called and eventually the Government had to rescind its decision. The challenge is that ten years later Nigeria is at this same junction and unfortunately some stakeholders and citizens would want the nation to take the same unfortunate step it took ten years ago. After almost 10 years the nation has spent trillions on subsidy payments with almost no major benefit to Nigerians except a few who benefit tremendously from the scheme. The current Federal Government has taken the bull by the horns and deregulated which a plethora of economists and analysts agree is the right thing to do. For those who speak of timing the question is that how long do Nigerians want this scheme to be in place after almost ten years since the last significant attempt to get rid of it. The truth is that Nigeria is at least ten years (and much more actually) late already and any further delay to full deregulation will lead to possible catastrophe in the not so distant future. In line with this Election Monitor strongly commends the Federal Government of Nigeria for taking this bold decision despite the current backlash and challenging economic situation in the country.

Secondly, the electricity tariff hike has also been condemned by some who feel that the burden on citizens will be too much. Based on information made available by the Nigerian Electricity Regulatory Commission (NERC) the new Service Based Tariff (SBT) is expected to achieve the following:

Ensure that prices charged by DisCos are fair to consumers but sufficient to allow recovery of efficient cost of operation including a reasonable return on capital invested in the business.  

Ensure that tariffs will be commensurate to the quality of service measured by number of hours and quality of service to clusters of electricity customers.

Provide the path to transitioning the Nigerian Electricity Supply Industry to service-based cost-reflective tariffs by July 2021.

Improvement in reliability and quality of supply on a progressive basis, as well as incentivize the operators to expedite metering of their customers.

In summary, the SBT is primarily designed to ensure that those who use more electricity pay more while those who use less pay less (what is the problem with that?). Nigerians must ask whether giving an electricity bill of the same amount to two houses who consume vastly different sums of electricity is actually fair and the right thing to do? Election Monitor strongly believes that the new Service Based Tariff is the way to go for Nigeria as it will ultimately work in favour of both consumers and the operators over time especially as it will encourage increased and much needed investment in the sector. What is critical here is to ensure that the objectives of the SBT are met and that there is effective regulation of the sector to ensure optimum compliance.

It is very clear that any attempt to reverse the deregulation of petrol or the new Service Based Tariff (SBT) while seeming to appear populist and beneficial for citizens in the short-run will lead to significantly increased levels of inefficiencies in petrol and power supply nationwide and eventually much greater hardship for more citizens and a considerably increased poverty rate. Nigerians need to ask whether they want a short-term fix to get a temporary high (and get deeper mired in poverty after the eyes are cleared) or a long-term solution though somewhat painful but that will bring a lasting joy and prosperity.

Election Monitor as stated earlier does not believe that a protest can in any way address the current challenges especially as a result of these new policies of Government. Therefore Election Monitor makes the following recommendations:

There is a need for citizens to refuse en mass to engage in any action which will lead to increased poverty and hardship for the people without addressing the core issues. Nigerians should remember around just a year ago protests were held against xenophobic attacks in South Africa with the resultant effect that many shops were looted and destroyed in some locations with some citizens being physically attacked. Many of the victims are struggling to get back on their feet if they are able to at all. While citizens have the right to protest citizens must ask what outcome will such an action produce considering the current realities?

Nigeria has spent several months in some level of lockdown which has had adverse effects on the economy. Many businesses (even the large ones) are barely making it, if operating at all while a plethora of people have been laid off with many receiving less pay but doing the same work with increasing living costs. Downing tools and shutting down the economy indefinitely will frustrate economic recovery efforts as well as pose a significant security risk to the peace and stability of the entire nation.

The Federal Government of Nigeria must urgently engage in massive and sustained grass roots sensitization of its new policies and why these are in the best interest of Nigerians for the long-term. Because there is a general trust deficit for Government, there is a need for Government to engage diverse stakeholders (some of which may have more credibility before the average citizen) to communicate these messages. An information gap means room for distortion of the facts and would allow anti-government agents to sow seeds of discord and misinformation to ultimately destabilize the country.

The NLC, TUC and other interested groups should not demand a policy reversal from Government but rather demand a framework (possibly backed by law) to ensure that the policies are fully implemented within a reasonable time frame with verifiable indicators. Labour should then hold, Government to this framework and ensure that the Government does what it says that it will do. Negotiations should not be about strike or no strike but should be about making sure these policies are implemented fairly, effectively and ubiquitously. For example most Nigerians understand that 24 hours power supply cannot happen overnight however what they detest is having to pay for power they do not consume. So Labour needs to hold Government and the operators accountable to ensure that all Nigerians are metered based on the presidential directive. Even though there is a cap for estimated billing Labour needs to advocate for a mechanism to ensure that this cap is not exceeded and that DisCos who flout this are held accountable. Ultimately once every power consumer has a meter the exploitation of citizens will drop significantly. This aspect of ensuring that the polices work for the average citizen should be the focus of Labour and other interested groups.

The NLC, TUC and other groups should demand the Federal Government establish a National Fund where all savings from subsidy withdrawal are accrued (other sources can contribute to this Fund as well). This fund should form the basis for a National Transportation Master Plan for Nigeria. The Federal Government alongside the state governments should come together (perhaps under the National Economic Council or any other platform) to agree on developing a nationwide public transportation system that will provide the average citizen access to quality and affordable transportation services without the purchase of a car or motorbike. This project will ensure that all major cities in Nigeria are accessible by rail and well coordinated bus services within the next ten years. The Federal Government should focus on Inter-State public transportation while states should focus on intra-state transportation (effective, time based local bus services; mono-rail connecting key locations in state capitals and other towns, trams etc). A plan to effectively utilize the nation’s waterways for safe and affordable transportation should also be included. Most importantly, The National Transportation Project would need to harmonise all the various means of transportation to ensure seamless interconnectivity. Trains get to airports; monorail gets to bus terminals and motor parks; boats get to motor or taxi parks etc. This project will be a truly national project and will require all states to cooperate and participate and commit to doing their own part. Once a state has signed into this the state is obligated to implement its own portion of the Plan irrespective of whoever is elected as state governor at the polls. This means continuity and a greater likelihood of success. Labour needs to drive discussions with Government to get this sort of transportation system functional with milestones that can be tracked and used to keep the project on track. Any state that fails to implement based on the timelines will face the ire of its people who will be sensitized about this Plan and will demand its prompt and full implementation. Since most Nigerians use petrol for transportation and power generation, these are the areas that must receive accelerated intervention with the savings from the withdrawal of subsidy. Once Nigerians see the National Public Transportation System coming to reality they will find it easier to accept the deregulation and increase in electricity tariffs. In addition some citizens and private concerns (both in and outside Nigeria) would be willing to invest in the Master Plan via a National Transportation Bond floated on the Nigerian Stock Exchange (and possibly other Exchanges) providing increased sources of funding for the project.

It is important to state that this Federal Government has already made gargantuan investments in the railway sector and clearly much more is needed and at a faster pace as much as is possible but having an organized National Transportation System is critical for socio-economic development in the country. Private refineries are fast coming on stream and local refining capacity will be very significant within the next five years.

Election Monitor calls on Labour and all stakeholders to shun any industrial action and discuss ways Government can make these policies work in the best interest of Nigerians. Citizens should increase their trust in Government especially considering the significant efforts made by Government in recent years despite the level of revenue coming into the country. This is a national problem and each state as well as the Federal Government, citizens, non-state actors and international partners need to support the process which will ultimately be in Nigeria’s interest.

Long live the Federal Republic of Nigeria!

Nigeria shall prevail!

God bless the Federal Republic of Nigeria!

Signed

Abiodun Ajijola

National Coordinator



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