Dangote refinery would have started selling diesel soon, meaning energy costs would have fallen for many SMEs and offices.
Could Nigeria have timed implementation of the removal of power subsidies to match with falling diesel costs?
Why the scale? Why not start in a smallish commercial town like Jos, Abeokuta or Nsukka, test the capacity of the households to absorb this power price shock, and then roll out nationwide with other cost incentives?
I am a capitalist. I understand why tariffs must rise but the communication about why tariffs must rise to the average consumer is absent, no trust has been built and this feels like another fiscal punishment.
Are SMEs supposed to borrow at 24% and pay these high rates for power? Are they being supported? Are we going to suspend Company Income Tax for a Quarter?
My fear is that this policy will be reversed, and the removal of the power tariffs will be labelled as a bad policy when the problem is bad implementation. This has been the fate of the PMS subsidies removal. Nigeria could not afford PMS subsidies; it was removed on day one of President TINUBU’s administration.
However, the rollout of so-called palliatives was bungled, discontent and inflation accelerated the government panicked and reversed itself in secret. Today reports indicate the PMS subsidies are back. Good policy bad implementation
You can’t have cheap power I rephrase we can’t have cheap power until we attract serious investment in the power sector that will boost productivity and ultimately reduce prices.
Removal of power subsidies means someone picking up the tab. the problem is not the cost of power but the earnings of the consumers using the power. In all these, keep in mind the minimum wage is still below N40,000 a month. How can a gas-rich nation have expensive power?
The answer is that gas needs to be drilled, captured, stored and piped to be economically viable. Kudos that Nigeria is building a gas pipeline to the Northern economies, or only took us 44 years and it’s still not complete.
We need power subsidies for our manufacturers to compete in West Africa and globally, no nation is sans subsidy. This is a time for the technocrats to step up and craft something smart.
May this policy succeed in allowing Nigeria to fix its power once and for all?