Electricity Tariff: IMF Insists Tinubu Remove Subsidy amidst Workers’ Protest

Nigerian workers started their nationwide protests against the last hike in electricity tariffs. They might just be warming up for a bigger challenge. The entire energy subsidy will soon vanish, and consumers will have to pay much higher.

According to the International Monetary Fund (IMF), the removal remains the only antidote to Nigeria’s runaway inflation rate.

Nigeria’s inflation rate stood at 33.20 percent in March 2024 —and has now risen to 34 percent.

The  IMF believes the rate can come down following the implementation of the 2024 social transfer scheme it partnered Nigeria to put together. No fewer than 15 million households or 60 million Nigerians will benefit from the scheme.

But Nigerian workers facing hardship now aren’t going to take any of that.

The National Electricity Regulatory Commission (NERC) initially reduced the increase, but the workers insisted on a reversal. The increased rate, N225/kwh came down to N206.8/kwh, about 8.1 percent reduction, owing to the naira appreciation.

While they battle that out, President Bola Tinubu, following IMF’s advice, will soon yank off government subsidies on electricity. 

The electricity authorities said the federal government pays over N1 trillion in subsidizing electricity.

“Once the safety net has been scaled up and inflation subsides, the government should tackle implicit fuel and electricity subsidies,” it said.

According to the IMF, the expensive and poorly targeted subsidies in Nigeria benefit higher-income groups more than the vulnerable Nigerians.

Protests are currently rocking Lagos, Kogi, Plateau, Abuja, and other states.

“It is unethical to force Nigerians to pay higher tariffs for non-existent electricity,” said TUC President Festus Osifo.

“Estimated billing is an extortion and daylight robbery against Nigerians.”

Tinubu has always backed down after pressure. It is not clear yet what his stand will be on the IMF advice.