By Naomi Uzor
The Lagos Chamber of Commere and Industry (LCCI), has condemned the newly introduced electricity tariff by the Federal Government.

In a release by the President of LCCI, Otunba Femi Deru, LCCI is concerned over the undue emphasis on electricity pricing as the principal consideration in the power sector reform and completely disagrees with this position.

“Over the last three years, we have seen different upward reviews in electricity tariff. Yet, there has not been any discernible addition to consumer value. If anything, the power supply situation has deteriorated over time. Load shedding and outright blackout has been the order of the day.

The Multi Year Tariff Order (MYTO) introduced in 2008 to moderate electricity tariff, apparently has sustainability problems, and is therefore being reviewed,” he said.

Nonetheless, he said, LCCI affirms that electricity generation by individuals and firms is merely a way of coping with a crisis created by the failure of governance, not a structured electricity generation enterprise and if there is any evidence of leadership failure in Nigeria, it is the embarrassing state of the public power supply, adding that it is, therefore, misleading to benchmark electricity tariff with these costs for the purpose of justifying a tariff review. This analysis is totally unacceptable.

According to him, the fundamental issues in the failure of the public power supply, as with other public utilities, is the failure of public institutions.  Therefore, the most critical elements of the power sector reform should be the creation of a new institutional platform for the delivery of electricity, focusing on operational efficiency and the integrity of transactions in the entire power supply chain and that tariff increase will not address current institutional shortcomings.

“We therefore caution against absolute commercialisation of electricity and other basic economic and social infrastructure. Such policies undermine development objectives and the welfare of the citizens. The important issue to address is the creation of the right institutional framework for the delivery of electricity to the people.  Such institutions should be totally insulated from the public service bureaucracy and meddling by the political leadership.

The management component of the problem of infrastructure delivery is much bigger than the challenge of resource adequacy. We need structures that will be managed by technocrats, not bureaucrats or politicians. Institutions that are credible and that would command the confidence of the populace. Institutional credibility is crucial and paramount for any meaningful reform,” he stated.