By James, Michael Igiri
The Minister of Power, Works and Housing, Babatunde Fashola (SAN), has
admonished power users on the need to halt the incessant litigations on the new tariff
review regime, describing the planned review as necessary for the growth of the power
sector in Nigeria.
Fashola stated this on Thursday in a public lecture which held at the J.F. Ade Ajayi
Main Auditorium, University of Lagos, where he spoke on the power sector reform in
Nigeria, challenges and the way forward.
The former Governor of Lagos State threw his weight behind the privatisation of the
power sector, adding, “I believe, however, that the privatisation that we did in 2013
was well-intentioned but delivered with some deception.”
The minister, used the opportunity to express, his displeasure at calls from some
quarters for the cancellation of the privatisation processes and highlighted the need to
rework the process and make it work.
On the tariff system, he revealed, “Tariff is not fixed by the minister; I don’t fix tariff.
I have no power over it. What happened during the last tariff exercise was that I
expressed an opinion of support for the tariff.
“Tariff is fixed by the Nigerian Electricity Regulatory Commission. Tariff proposals
come from your Discos who should have met with you at consultative meetings. When
tariff meetings are called in the future, everybody must be there.”
According to the minister, there are major and minor tariff reviews, and a major
review is due every five years, but a minor review is due every six months.
“It doesn’t mean every time a minor review is due, the tariff will increase. If exchange
rate is N165 (to a dollar) when the tariff was reviewed and then it goes to N400, put
yourself in their shoes,” he said.
Describing tariff reviews as a necessary part of any business, he cited Singapore as
one of the countries that had really implemented tariff review for all of its utilities
Fashola said, “We must stop going to court to get injunction to stop tariff reviews, it
puts us in the news for the wrong reasons.
“Government must also not interfere with tariff. One of the things that happen in the
last elections was that as the elections were coming, the last administration reduced
tariff in order to make you and I like them. But it created a massive debt for Nigeria.”
He added that when the government ordered the tariff reduction, it did not reduce
interest rates, the exchange rate cost of wages of the staff that were generating power
or the cost of gas and other inputs.
Briefing participants at the event on current state of power in the country, the minister
said the capacity of the power grid had expanded to 6,200 Megawatts under the
President Muhammadu Buhari administration following the completion of some
He said, “When the National Integrated Power Project started, that is over 10 years
ago now, several contracts were issued to develop transmission projects. Many of the
equipment that were imported by the contractors were trapped at our own ports in 800
containers for almost 10 years, because the government did not budget to pay those
Other speaker at the event Prof. Akin Iwayemi of the Centre for Petroleum, Energy
Economics and Law (CPEEL), University of Ibadan advised that in order to meet the
demand for electricity that is stable and reliable, Nigeria must incentivise the whole
system and galvanise all her limited resources.
The event which was organised by the Department of Economics, had in attendance
the Pro- Chancellor and Chairman of Council University of Lagos Dr. Wale
Babalakin, Vice-Chancellor University of Lagos Prof. Rahamon Adisa Bello, former
Vice-Chancellor Prof. Oyewusi Ibidapo-One, Dean Faculty of Social Sciences Prof.
Iyiola Oni, as well as other members of the university management as well as faculty
members, academics, senior staff of the university, stakeholders in the power sector
and members of the press.