Electricity Tariff Hike: Hospitality, tourism industry under pressure to lay off workers
…rejects tariff increase, calls on FG to rescind decision
By Gabriel Ewepu – Abuja
As electricity tariff hike plunges businesses to total collapse, the Nigerian hospitality and tourism industry is under pressure to lay off millions of workers as they are unable to pay heavy bills under new tariff.
This was made known in a statement signed by the Secretary, Network for Electricity Consumers Advocacy of Nigeria, NECAN, Uket Obonga; President, Federation of Tourism Associations of Nigeria, FTAN, Alhaji Rabo Saleh; President of Nigerian Hotels Association, NHA, His Royal Highness, Patrick Anyanwu; and President, Hotel Owners Forum of Abuja, Dr Chike Ezeudeh, including Power Up Nigeria at a joint media conference on electricity tariff increase by the Federal Government.
Reading from the statement on behalf of the group, National Secretary, NECAN, Uket Obonga, accused the government of not consulting with them and others as earlier agreed by the DISCOs to shift electricity tariff hike to the first quarter of 2021 following the intervention of National Assembly in June 2020 due to the lockdown and impact of the Coronavirus, COVID-19 pandemic, only for them to increase tariff on September 1, 2020.
Obonga also described government’s action as sad and Nigerians forced to pay for mismanagement in the power sector because other nations are enacting policies and taken measures to cushion hardship imposed on their citizens due to the Coronavirus, COVID-19 pandemic, “the Federal Government has chosen to place an unpardonable burden on Nigerians not only the electricity tariff increase but also increase on the pump price of petrol at a time that the people are suffocating under a distressed economy.”
He said: “The effect of the new tariff hike on business and the nation’s economy include business closures. Already, Nigeria hospitality and tourism industry is reeling and groaning under the weight of very high electricity bills, which they are struggling to settle every month.
“To increase the tariff, as it is now it will force many in the industry to close shop. One can only imagine the number of jobs that will be lost in the process; the fear is that many of such business at the micro, small and medium levels will be forced out of business.
“Loss of Jobs; when businesses close shops, thousands of employees will be laid off, thereby worsen the unemployment situation in the country; There will be an increase in inflation; The fates of Businesses are now in the hands of DISCOS.
“Finally, we urge the Federal Government to listen to the cry of the people from voices from different Organizations, Labour groups and NGOs. Electricity consumers ask that the newly introduced billing system be abolished.”
Also speaking the President, Hotel Owners Forum of Abuja, Dr Chike Ezeudeh, warned that hotel owners will have no coice than to go on massive lay-off of workers from the industry as an implication of tariff hike.
Ezeudeh said, “There is direct implication of electricity tariff hike on us. I can tell you authoritatively that we are the largest employers of labour after government. We have a lot of workers under the hospitality industry in Nigeria.
“Due to this COVID-19 a lot of our workers were sent home, we are working with skeletal number of workers. Even when we were under COVID-19 lockdown we were receiving bills from the DISCOs unlike other places outside Nigeria, like Ghana where they are trying to support some of these industries but here in Nigeria it is the other way round.
“The implication will be horrible because with that number of workers we have and as second after government, and again we just close shop we cannot afford to pay which is 100 per cent increase. For some hotels in Abuja pay N57 million every month; some N2 million, N5 million, N2 million and the lease is N500, 000, and some of us are not operating fully, while some are closed.
“If you are in business if you cannot afford to pay you lay-off your workers; the impact is monumental and he government will create more problems including unemployment, insecurity and others.
“In Abuja here, we have about 1, 200 hotels and we are employing 90, 000 to 1 million people, you can imagine the impact it is going to have on Abuja alone if we close job and throw some of this people into the labour market. The government is insensitive. They would have consolidated with stakeholders.
“Instead of giving palliatives to the hospitality industry, even we wrote to the Vice President’s Office appealing for palliatives, reduction in bills while COVID-19 was seriously on. Despite that the government went on to increase electricity tariff, and it is an insensitive government that can do that. The impact is going to be terrible.”
Also reacting was the President, Federation of Tourism Associations of Nigeria, FTAN, Alhaji Rabo Saleh, saying they will continue to press with their demand of abolishment of electricity tariff hike.
“We will keep pushing because the government supposed to be a listening government. Policies are to be made to favour the people, and what we are saying is that this is not the right time to come up with electricity tariff hike because of the effect of COVID-19 on the economy, on citizens, and the world at large.
“Therefore if you want to increase electricity tariff this is not the time to do that because you have to take into consideration on how it affects the citizenry. Therefore as people and organizations we will keep pushing and complaining until the right thing is done, and nothing is done we will not keep quiet. The media need to join us in this struggle because we are all Nigerians and are affected by the hike”, Saleh said.
They also rejected the increased electricity tariff and described it as unpardonable burden on Nigerians and called on government to rescind decision.
“It is sad to note that, while other nations are enacting policies and taken measures to cushion hardship imposed on their citizens due to the pandemic, the Federal Government has chosen to place an unpardonable burden on Nigerians not only the electricity tariff increase but also increase on the pump price of petrol at a time that the people are suffocating under a distressed economy.
“It is very unfortunate, that the Federal Government could allow itself to be misled into believing erroneously that tariff increase is the silver bullet that will shoot the sector revenues to Eldorado when the root cause of the sector revenue and liquidity remain unattended.
“This is not the first time the DISCOS are agitating for price hike. The past MYTO reviews which ended up increasing the price of electricity has not yielded the desired result. Recall that as soon as the MYTO 2015 order came into effect in February 1 2016 the DISCOS began another quest for another increase.
“They flagrantly disregarded the provisions of the MYTO path and energy charges contained therein, as the DISCOS went ahead to choose which tariff rate to use in determining bills given to the customers. The incessant request for tariff has become a hypothetical exercise rather than the solution to the sector revenue problem.
“We therefore wish to state categorically that we reject the September 1st 2020 tariff increase as ordered by NERC. We call on the Federal Government of Nigerian to rescind the increase because we note that there is nothing put on ground to cushion the effect of the dual increase of the end user tariff and the pump price of petrol”, he stated.
According to the group their basis of rejecting the tariff hike there are basic foundations that the Federal Government, the Regulatory Commission and the Distribution Companies are supposed to have built before shifting the burden to consumers.
It also stated that Some of the identified areas which should have been addressed before contemplating any further increase include: The Aggregate Technical, Commercial and Collection (ATC&C) Losses; Metering; Regulatory independence; Lack of reliable sector data; Discrimination against and segregation of consumers.
Written by Kartia Velino