The mounting outcry over the exploitative "Band" electricity billing structure introduced by the Nigerian Electricity Regulatory Commission (NERC) has further impoverished beleaguered and suffering Nigerians. Many small and medium scale businesses in Lagos, in particular, have closed shop due to their inability to pay the outrageous bill. This is happening at a time when the economy is depressed. Why should the government be more interested in ripping off the people using Nigeria's notorious epileptic electricity system instead of promoting policies that would improve electricity supply? Electricity, being a basic necessity, should be made affordable. The NERC should review the current "Band" system with a view to making it affordable.
The Band Structure and Its Impact
According to reports, the Nigerian Electricity Regulatory Commission introduced the new electricity tariff structure on April 3, 2024, as part of its Service-Based Tariff (SBT) initiative. The system categorizes customers based on their daily electricity supply hours as follows: Band A: 20 hours or more; Band B: 16-19 hours; Band C: 12-15 hours; Band D: 8-11 hours; and Band E: 4-7 hours. The tariff rate for Band A is N209.5–225 per kilowatt hour (kWh), depending on the Disco; Band B areas tariff is N180–N200/kWh; Band C areas tariff is N150–N170/kWh, and so on. The classification, according to NERC, is to reflect the varying levels of service quality and costs across different regions. But the tariff rates for Band B to E remain subsidized (questionable), while Band A customers pay a higher rate.
From all indications, it appears that the main focus of NERC is to exploit hapless Nigerians given the frequent tariff increases for the unending epileptic power supply. For instance, in 2017, the average tariff was raised to N24.20/kWh, up from N10/kWh, representing a 142 percent increase. Again, in April 2024, NERC approved a 250 percent tariff hike for Band A customers, thereby increasing the rate from N66/kWh to N225/kWh. This affected about 15 percent of Nigeria's 12 million electricity consumers who receive about 20 hours of power supply daily. That is not the end. There was a proposal in 2025 to further raise electricity tariff by over 66 percent, from N116.18 to N193.63/kWh, as the government plans to end questionable subsidies.
Consumer and Business Hardship
NERC claims that the increases aim to reflect the actual cost of electricity supply and attract investments in the power sector. While this is going on, consumers are bemoaning the negative impacts of the increases on their finances amid severe economic challenges. The impacts of electricity tariff increases on consumers and businesses are enormous. Increased electricity bills raise the cost of living, thereby affecting household budgets. Sadly, many consumers disconnect their electrical gadgets to reduce cost. This lowers the standard of living of individuals and households, defeating the purpose of providing electricity in the first place. On businesses, there is an increase in operational costs, which affects profitability. There are price hikes for goods and services, contributing to inflation. Small and medium enterprises (SMEs) struggle with the increased electricity bill.
The government claims it has been working to balance the need for tariff increases with consumer protection, considering the country's economic challenges. Some measures, according to the government, include targeted subsidies focusing on vulnerable groups; encouraging distribution companies (DisCos) to reduce losses; and promoting renewable options over grid electricity.
Inequities in the Band System
The electricity band structure in Nigeria is nationwide, covering various states and distribution companies (DisCos). NERC classified consumers into five bands (A–E) based on their daily electricity supply hours, with Band A receiving the most hours (20–24) and Band E the least (4–8). It is pertinent to ask why some areas would be receiving as much as 24 hours of electricity per day while another area receives as low as 4 hours in the same country. What is the basis for the classification? Is it based on power supply or what? Why should some generating companies (GenCos) and DisCos be performing very well while others produce below par? Why let the underperforming companies remain instead of being dropped and replaced?
There are three main sources of power used in Nigeria: thermal, hydro power, and gas. Which power source is supplying the different areas? Why can't the country achieve Band A level of power supply throughout the country? Investigation showed that many of the consumers in the so-called Band A switch off freezers, air conditioners, and other household electrical gadgets to reduce cost. Some consumers get as much as N140,000 bill per month in a country where the minimum wage is as low as N70,000. Why should electricity alone swallow all the meager income available to a typical household in Nigeria?
A History of Failure
There is reason to believe that the current electricity delivery by NERC is not meant to light up the country for industrial and business development but to rip off the people. It is on record that the power sector is one of the most corrupt sub-sectors that have for years failed the country after gulping billions of dollars worth of investments. As it were, the Nigerian government has never had the political will to give the country stable power supply. Nigeria's electricity journey started in 1896 with the first electricity generation in Lagos, using a 30kw generator. Between 1950 and 1960, electricity supply expanded to Ibadan, Port Harcourt, Kano, and other cities. The Electricity Corporation of Nigeria (ECN) was established in 1962. In 1972, the ECN and Niger Dams Authority were merged to create the National Electric Power Authority (NEPA). Later, the Electric Power Sector Reform Act (EPSRA) came into force, and NEPA became the Power Holding Company of Nigeria (PHCN). By 2013, PHCN was unbundled into 11 distribution companies (DisCos) and six generation companies (GenCos). Today, Nigeria's electricity sector is regulated by NERC. It is NERC that devised the exploitative band structure that has worsened the electricity situation in Nigeria.
After more than 100 years of electricity development, the country is still wallowing in darkness caused by epileptic power supply. Rather than work towards improving infrastructure to boost power supply, NERC is more interested in exploiting consumers using the meager power supply available to the country. This is outrageous.
The Need for Change
Power generation using hydro dams is capital intensive. Billions of dollars have been expended on the power sector without success. The nation is literally in darkness. The problem of the sector is not funding. No amount of financial input would bring the desired change. There is a need to seek cheaper and environmentally friendly energy sources to turn around the sector. The truth is that Nigerians are tired of being charged disproportionally hiked electricity tariffs without commensurate power improvement. Besides, saying that the government is subsidizing power supply that has been privatized is ridiculous and unacceptable. Enough of national deceit and graft.
