Nigerian Households and Businesses Grapple with Steep Electricity Tariff Hike

A recent pronouncement by the Nigerian Electricity Regulatory Commission (NERC) has sent ripples of concern across the nation, as many citizens now face significantly higher electricity tariffs. The revised pricing structure, which came into effect recently, primarily targets Band A customers—those who supposedly receive a minimum of 20 hours of power supply daily—witnessing a sharp increase of over 200% from N66 to N225 per kilowatt-hour.

This substantial upward adjustment is poised to exert immense pressure on both domestic budgets and operational costs for commercial entities. Small and medium-sized enterprises (SMEs), which are the bedrock of Nigeria’s informal economy, are particularly vulnerable. Many fear that the surge in energy expenditure could erode profit margins, stifle expansion plans, and potentially lead to job losses as businesses struggle to absorb the increased overheads or pass them on to already burdened consumers.

The government and NERC justify the tariff review as a crucial step towards achieving a cost-reflective electricity sector, arguing it will attract much-needed investment, reduce reliance on government subsidies, and ultimately lead to improved power supply quality. However, public reaction has been largely one of discontent and apprehension. Labour unions and civil society groups have voiced strong opposition, highlighting the current harsh economic climate characterized by persistent inflation and the lingering effects of previous subsidy removals.

As the nation navigates these economic adjustments, the impact of the new electricity tariff is expected to cascade through various sectors, potentially exacerbating the cost of living crisis for millions of Nigerians already contending with dwindling purchasing power. The coming weeks will reveal the full extent of this policy’s implications on household resilience and the broader economic landscape.