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Wed, May

Stop Electricity Subsidy, IMF To FG, As Labour Begins Protest

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The International Monetary Fund, IMF, has cautioned the Nigerian government to phase out costly and regressive energy subsidies as it is critical to creating fiscal space for development spending and strengthening social protection while maintaining debt sustainability.

 

In a report published recently by the IMF, the organisation stated that the subsidies would guzzle three per cent of the nation’s Gross Domestic Product in 2024 as against one per cent in the year before. 

IMF noted that “Adequate compensatory measures for the poor were not scaled up promptly and subsequently paused over corruption concerns. Capping pump prices below cost reintroduced implicit subsidies by end-2023 to help Nigerians cope with high inflation and exchange rate depreciation.” 

In addition, the organized labour, Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) on Monday commences nationwide protests over the electricity tariff hike and removal of subsidy from the power sector by the Federal Government. 

The labour protest led to the shutdown of the Abuja Headquarters of the Nigeria Electricity Regulatory Commission (NERC), the Ministry of Power and State offices of power distribution companies. 

The NLC and the TUC insisted on the reversal of the tariff hike even as they expressed dissatisfaction with the epileptic power situation in the country, saying that it is affecting economic growth. 

However, the House of Representatives, organized labour, the Nigerian Bar Association, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, electricity consumers and Civil Society Organizations, demanded a reversal of the hike to the subsidy era tariff. 

The House called on the NERC to suspend forthwith the implementation of the new electricity tariff nationwide. 

Recall that during an investigative hearing on the new tariff, Chaired by the Senate Committee on Power, Senator Enyinnaya Abaribe; the Minister of Power, Adebayo Adelabu, argued that there would be a nationwide blackout in the next three months if the increase in electricity tariff was not implemented. 

The NERC announced the hike in the electricity tariff for Band A customers at a press briefing in Abuja on April 3, revealing that those affected would pay N225 per kilowatt-hour, up from the previous rate of N68/kWh.

 

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