Public Universities and the New Electricity Tariff

It is no more news that the electricity tariff for those placed on Band A has been jacked up from ₦68 per kWh to ₦225 per kWh excluding VAT while those placed on the remaining bands are denied electricity. A senior colleague commented that this is insane. I agree with him. It is truly insane.

One dummy they are selling to us was that the increment only affected a small percentage of Nigerians. When they are bent on implementing anti-people policy, they are often very economical with the truth on the real impact. They take the Accountant way of how much money to save without a critical study of the economics of such saving and the impact on the people whose well-being should ordinarily top the government's priorities.

The industrial zones are on Band A daily with ₦225 per kWh. They won't have an issue with the bills after all, it will be factored into the price of the goods and services, and the consumers will pay for their electricity bill. Even the other small-scale industries buying fuel of ₦700 per litre to run generators to provide services will put the bill on their service charges. So, whether on Band A or the other bands without electricity, the burden is on the people, the consumers.

What about electricity consumption in our universities? Nearly every household has a child in the university. Most of the universities are on a 33kV dedicated line. That is Band A and a huge electricity is consumed in the university. The universities were paying ₦68 per kWh till the end of last month. Effective from 1st April 2024 universities will be paying electricity bills of ₦225 per kWh. But who will pay the bill? The government or the students?

Recall that federal universities were in crisis sometime last year over their inability to settle their accumulated electricity bills. The electricity supply of a number of universities was cut off for weeks in 2023. The ABU's case made headlines when its electricity supply was cut off. Any university campus can be without electricity without anyone noticing but not ABU, the largest university in sub-Saharan Africa.

The ABU case brought the attention of the federal government to the electricity crisis in public universities. Agreements were reached and electricity was restored after being in darkness for a few weeks. The affected universities were in darkness because they could not afford the accumulated bills that were in millions based on ₦68 per kWh, a tariff considered high for universities.

Some people find it surprising to hear that universities were in debt over electricity and several questions were asked. The questions will be; where is the owner of the universities and what are the responsibilities of the owner to the universities? These are publicly funded universities and you would have expected the federal government to sort their bills through the Ministry of Education. But the overhead from the FG for the big universities is about ₦150 million per annum. However, the average electricity bill per annum of some of the big universities is about ₦1.2 billion when the tariff was ₦68 per kWh. Who pays the bill?

The universities are expected to sort themselves out anyhow. It means that the universities must generate funds internally to avoid future electricity crises. Such situations led to an increase in some levies by the universities to accommodate the current reality. Universities have tried to raise funds from the students' registration fees for their basic needs to be in operation.

While the universities were thinking they had raised a reasonable amount based on ₦68 per kWh to avoid an electricity bill crisis in 2024, NERC woke up to announce the insane new tariff of ₦225 per kWh with immediate effect. The new tariff is 332% of the old rate.

A recent energy audit in ABU estimated the electricity consumption of the University to be about 1,629,936 kW in a month. This estimate was very close to the monthly energy consumption when students were in session. When you multiply that by ₦225, It will give you ₦366,735,600 electricity bill per month. In one year, the electricity bill will be ₦4.4 billion per annum. The annual electricity bill of ABU will jump from about ₦1.2 billion to 4.4 billion naira and the bill must be paid. So, who will pay for it?

ABU is said to have about 50 thousand students. If you share the bills per student, that will be ₦88,000 per both undergraduate and postgraduate students. The municipal charge paid for this academic session by the students to take care of electricity bills, water supply, and sanitation was ₦15,000 per student. That amounts to about ₦750 million for a year. An amount that was below the electricity bill for 2024. So, for universities like ABU to cope with the bills, they have to explore the goodwill of the few that have the university at heart.

With the new tariff, the electricity bill from April to December 2024 has tripled. It will be about ₦3.3 billion as against ₦997 million that the university envisaged for the 9 months. Who will pay for it? The nonconstituted university councils or the acting council (the education minister) will figure out the over-tripled electricity bill from April to December 2024 since you can't bill the students in the middle of the session.

However, the message is that the new tariff will most likely affect the student's registration fee for the next academic session. The charges from municipal services may likely increase by ₦70,000. The staff living in the quarter should also get ready for ₦225 per kWh bill.

Even the NLC made no comment on the insane tariff that is counterproductive because they believe the dummy that it won't affect ordinary Nigerians. Before you also swallow the dummy like NLC, I just want to let you know that the new electricity tariff will at least increase the fees of your child in public universities.

I learnt that the Minister of Power, Adebayo Adelabu, is angry that electricity is affordable to Nigerians and more angry that we let our fridges work all day. Are fridges meant to be turned off? He has vowed to make electricity not affordable for us to run our fridges all day. The typical Elitist attitude. He is imagining why others should have access to what should be exclusively theirs. That is not surprising after all he is an accountant. It's all about the figures. They hardly think of the economic implications.

We can excuse him. The minister is an accountant who spent most of his career in the banking industry before venturing into politics. He has zero experience in the management of the power sector. He is probably yet to realise that the power sector is beyond just crediting and debiting the balance sheet. I have not heard him speak about the slave wage paid to Nigerian workers. What we are paid does not affect him.

I lived in the UK for 3 years and in Norway for 2 years. For these 5 years, in the houses I occupied, the fridges worked for every second that I spent there. Electricity was more than affordable even from my stipend as a PhD student. Government appointees should think before they speak. They should stop being sadistic and allow Nigerians to breathe.

So amazing that the president can just stand up to announce fuel subsidy removal with immediate effect without any committee meeting. He floated the naira without a committee meeting. It's been 10 months now since the subsidy removal and the committee is still meeting (1 billion naira meetings) but yet to come up with a new minimum wage. Then, while waiting for the minimum wage to cushion the effect of fuel subsidy removal, the government just decided to increase the electricity tariff by over 300% with immediate effect without any committee meeting. So easy to take from the people but giving to the people needs months of committee meetings. That is heartless.

We are yet to recover from the effect of subsidy removal, hyperinflation from the combined effect of subsidy removal and floating naira, the imposed poverty, and now a tripled electricity tariff. Who are the economic advisers? IMF and their agents? What happened to the general well-being of the people, the electorates, that should be a priority?

What I do not understand is how the president and the men around him think we can grow Nigeria by strangulating the people.

Eid Mubarak.

12/04.2024

By

Prof. Abdelghaffar Amoka Abdelmalik, PhD.
Ahmadu Bello University, Zaria.
aaabdelmalik@abu.edu.ng.

Copyright © Amoka 2024