Anguish On The Land

…As Nigerians Groan Under Incessant Prices, Tariffs Hikes

• Within the past 12 months President Buhari has raised tariffs 5 times

• In 2019, Buhari imposed the heaviest fuel hike on Nigerians

By Mike Odeh James
These are not the best times for one to be a Nigerian perhaps. With millions of Nigerians out of job due to the effect of the novel corona virus and against the backdrop of being locked down for close to seven months with little or no source of income coupled with already crippling economy, closures of the nation’s boarders, raising insecurity, hunger, the Federal Government has slammed Nigerians with two major price increases which is now having a devastating consequences on the citizens. Hunger related sicknesses and high blood pressure has affected many homes in today’s Nigeria.

Just as Nigerians were complaining of the quality of services provided by firms saddled with the responsibility of providing power for the country, the National Electricity Regulation Commission, NERC, announced that it would review upward tariff on electricity. This was done with the approval and blessing of the federal government, a supposed democratic structure that came with the mantra of Change and promises 5 years ago to bring succour to Nigerians.

According to the new tariff via a NERC directives, Abuja Electricity Distribution Company (AEDC) residential customers R3 that were paying N27.20 per unit will now pay N47.09 and N63.42 by next year.

Similarly, the Ikeja Electricity Distribution Company (IKEDC) customers, the R3 category paying N26.50 per unit will now pay N36.49 per unit and later N58.

In effect, the National Electricity Regulatory Commission has raised the tariff by over 100% from N30.23 for 1Kw/hr unit per hour to N62.23 per Kw/hr.

The electricity tariff hike takes effect from August this year, even as the agency says the hike would only affect the rich, while the poor won’t be affected. But the current Bill’s that there distributed last week across the country contradicted such assurances as the increased has affected every home in Nigeria.

However, watchers of the sector said the increment would be applicable to all Nigerians while services would still remain poor. They have been proven right.

Even as the NERC came up with the hike in tariff, the vast majority of Nigerians opposed it prompting the Senate President to direct NERC to halt the proposed hike.

While the National Assembly was directing the NERC to halt its decision to increase tariff, early in September, the Presidency announced that the pump price of Petrol Motor Spirit, PMS, popularly called petroleum has been increased by 100 per cent. Accordingly, Nigerians would effectively start paying N151 per litre for PMS, nonetheless, in many parts of the country, Nigerians are paying N161.

This is the third time in three months the Petroleum Price Regulators Agency would review upwards the price of PMS in a move Nigerians say lacks human face especially considering the increasing difficulties Nigerians were subjected to due to poor economic policies, corruption and lack of political will to write the wrongs of the past as they earlier promised.

Many have wondered why President Buhari, who had in the past, swore that fuel subsidy was a fraud and that he would not increase the pump price of petrol motor spirit, suddenly went back on his promises and started one of the season of hikes in all aspects of government services to Nigerians.

Speaking at the first Inter Ministerial Review Retreat on 6 September, the president said there are good reasons why it was necessary to raise fuel and electricity tariffs.

The President said the COVID-19 pandemic, which had affected economies globally, forced his administration to make some necessary far-reaching adjustments for long-term gains with some initial pain. Other governments and economies across the world that are worse affected by the effects of the coronavirus pandemic did not approved such an increase which is considered untimely and insensitive on their people but instead offered practical interventions to their people. This is happening when the value of the Naira continued to depreciate against the United States dollars while that of other countries including African countries like Egypt, Algeria, South Africa etc remained very stable against the dollar.

Mr. Buhari further added that raising price of fuel means doing away with the wasteful nature of fuel subsidy, an argument he consistently condemned and regarded as insensitive when Goodluck Jonathan was the president.

The President, who said there was no provision for fuel subsidy in the 2020 budget, assured the nation of government’s commitment and readiness to prevent marketers from raising prices arbitrarily or exploiting them.

Buhari, who expressed dissatisfaction with the quality of service offered by the Distribution Companies of Nigeria, DISCOs, however assured Nigerians that the hike in electricity tariff is progressive and would not hurt the poor even though it is quite visible across the country that the poor which forms the majority are already feeling the effects of the hike while many businesses that are struggling to survive were left in uncertainties.

Buhari gave the assurance that these painful changes would in the long run lead to an improved fuel supply, constant power supply and enhanced industrial outputs even as casualties of hunger continued to raised.

The decision of the Federal Government no doubt has some serious and immediate impacts on the lives of Nigerians.

Ibrahim Mada is a Kaduna based media practitioner, he said that the covid-19 already had a devastating effect on his finances and with the recent hikes in the prices of electricity and fuel tariffs; he is almost at a breaking point.

He had this to say: “Before now, for a trip to Maiduguri from Kaduna, I used to buy fuel worth N16000 but now it has jerked up to N24000.

He further lamented, that “If you add that to the electricity bill and rising cost of food items, you may develop high blood pressure.

Mada is not alone, with the hike in fuel price, increase in transport fare in the horizon.

A bus ride from Gonin Gora to Leventis roundabout in Kaduna, which before now costs just N100, has upped to N150. This itself has metamorphosed into rise in the prices of food stuffs.

A bag of foreign rice now goes for about N32,000 as against the previous price of 28,000; while a bag of local rice that normal costs N22,000 is now selling for N26, 000.

Similarly, a 50kg bag of flour has increased from N10,500 per bag to N13,500 per bag; while Sugar has also increased from N13,500 per bag to as high as N29,000 and then to N19,000 per bag.”

Also, margarine rose from N5,800 to almost N11,000; while a 25 litre can of vegetable oil, which was about N13,000, now sells for N16,000; just as Milk, which was hitherto N29,000, now goes for N52,000.

Generally speaking, Food prices seem to be on the rise since the fuel hike.

According to the National Bureau for Statistics, NBS, Nigeria’s inflation stands at about 12.80 % in the second quarter of this year, while food inflation rose by 13%. The NBS figures are sure to rise further in the following months due to the hikes.

Similarly, small scale businesses such as barbing saloons, hairdressing saloons and bakeries may be forced to pack up due to epileptic power supply coupled with hikes in both power and electricity bills.

The Federal Government seems to have based its unpopular decision to remove fuel subsidy and to raise electricity tariff on the following reasons:

The removal of subsidy would free a lot of cash for developmental and industrial uses and with huge cash in its vault, the Central Bank would release more money in the foreign exchange market.
With government pumping money into the factories, factories would witness a boom in production, this would trigger employment opportunities and because of the increase in output, inflation would start declining.

However, the government also believes that inflation would increase to about 13% but as industrial out puts increase, it is projected that by 2021 inflation would reduce drastically, meaning that increased productivity would force down inflation in the long run.

Disposal income of Nigerians would decrease by about 3%, which would run to about $12 in the short run, but in the long run it would pick up swiftly in the long run as productivity increases.

The government is also projecting that the external reserves would also record a huge decline as the CBN would dip into it to fund industrial outputs, however, that would be mitigated by price of crude oil at the international market which stands at about $41 per barrel as against $21 per barrel.

Furthermore, the Buhari government is also hoping that the World Bank and other financial institutions would release money to the Federal Government as agreed under the terms for funding the power sector. However, the reality on ground is very bleak for millions of Nigerians.

According to Friday Agbo, a fimacoal expert, the cost of the Buhari administration on Nigeria would be the people who would lose their livelihoods. Furthermore, he believes robbery and other Social vices would also be on the increase.

SEASON OF HIKES

Apart from fuel and electricity where the hikes are very pronounced, the Government has imposed new taxes on Nigerians surreptitiously since it came to office on May 2015.

On July 1, 2020, Mr. Abubakar Ahmad, Communication officer for Federal Inland Revenue Service, FIRS, directed property owners and agents to charge accommodation via stamp duty and remit it to the FIRS.

The directive simply means that all Nigerians who live in rented apartments be it flat, semi -flat and two rooms from July of this year would pay 6% charges on the rent they pay for their accommodation.

In the same way, on January 13, 2020, Buhari signed a law that increased the Value Added Tax 9VAT) from 5% to 7.5%.

Financial experts are also saying that the water bill is also aimed at taxing people of the water they use. Already, some states of the federation are on the process of imposing tax on citizens who have boreholes and other sources of water within their domains.

In 2016 the highest increase in fuel prices since the history of the removal of fuel subsidy was recorded.

Not a few Nigerians recalled two video clips where incumbent President went bitter that Nigerians have suffered so much and do not deserve the government of President Goodluck Jonathan for its ‘evil’ policies.

They also recall how President Buhari, when campaigning for the president as the candidate of the All Progressives Congress openly said that anyone that increased the pump price of petrol above N50 per litre is not a godly person.

Today, according to Balogun Ajaikeye, President Buhari has surpassed the other Presidents as the President with polices that are meant to further pauperize Nigerians.