By Olusegun Obisanya
The Institute of Chartered Accountants of Nigeria (ICAN) has enjoined electricity regulator, Nigeria Electricity Regulatory Commission (NERC) and the Distribution companies (Disco) to push forward to a later date in “future” its planned hike in electricity rate hike.
The President, ICAN, Dr. Innocent Okwuosa was quoted in a statement to have said that the hike is ill-timed, adding that the masses are yet to recover from the negative impacts of recent macroeconomic policy decisions of government.
Although the professional body noted that electricity price review is in accordance with the bi-annual review process as entrenched in the Multi-Year Tariff Order (MYTO) to reflect the current realities in the macroeconomic space but the recent application to increase the price of electricity has raised different criticisms due to its timing and increased undesirable ripple effects on the common man.
Okwuosa posited: “Having considered the applications and the current economic situation, we recommend that NERC and the Discos should defer the implementation of a rate increase to a future period. This is because Nigerians are still grappling with the effect of macroeconomic policy decisions such as the removal of petrol subsidy and unification of the foreign exchange rates.
“The proposed increases at this time would further worsen the plight of the masses and push more Nigerians into multi-dimensional poverty. Furthermore, the increase would significantly increase the cost of doing business, particularly for SMEs. These enterprises may be unable to pass on the additional costs to their customers, increasing the risk of business closures, and further worsening the unemployment rate.”
ICAN also asked the government and NERC to consider “short-term tax breaks and other incentives to the Discos, as a form of production-focused subsidy as an alternative to rate hike.
The accounting body implored the Discos to “invest further in their distribution network to reduce technical losses and build a platform for sustainable electricity distribution.”
Okwuosa indicated that the Institute was prepared to offer necessary support to the regulatory agency and Discos to promote transparency, fairness and accountability in the electricity sector.
He said: “Chartered accountants are well placed to support the Discos in actualising areas of improvement.
“Our members possess the expertise and experience to support the Commission and Discos in providing deep insights on the inputs, market conditions and assumptions related to the proposed price increases.
