Increase in electricity tariff in Nigeria is inevitable. There have been several rumored news regarding electricity tariff increment in Nigeria, although some of the distribution companies have debunked the claims but we understand same companies have now introduced a cap on energy quantity an individual account can purchase.
Harsh Business Environment in Nigeria
Nigeria’s inflation rate rose for the fifth consecutive time to 22.41 percent in the month of May 2023 from 22.22 in the month of April. Subsequently, the Naira now trades about 771.251 to a dollar as a result of the Federal Government policy on floating the national currency. These two factors would inverable affect cost of power generation and operations hence Discos would have no other choice than to increase the electricity tariff.
Current Energy Tariff in Nigeria is Unsustainable
Nigerians currently pay $0.065 per KWH which is very affordable compared to the cost of energy in UK at $0.44 per KWH, $0.23 in the US and South Africa charges per KWH at $0.148 for individual and $0.071 for business owners.
The GDP per capital in Nigeria is around $2449.59. Ordinarily, this figure looks good and within the world’s average however because of high level of corruption and unequal spread of wealth in Nigeria, 63% of persons living within Nigeria (133 million people) are multidimensionally poor according to reports by National Bureau of Statistics.
