In recent weeks, discussions surrounding the planned increases in electricity and telecom tariffs in Nigeria have generated considerable debate, and rightfully so. While there are many supporting the tariff hikes as necessary measures for sector sustainability, the broader implications of such increases on the average Nigerian cannot be overlooked.
These price hikes, which will inevitably push up the cost of living, intensify inflationary pressures, and strain household budgets, are bound to exacerbate the financial challenges many Nigerians are already grappling with amid a protracted economic downturn.
As announced by the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, the increase in electricity tariffs is intended to establish a cost-reflective pricing model. This, it is hoped, would attract more private investment into Nigeria’s beleaguered power sector. However, such reforms come at a cost.
The timing of these increases, particularly in the context of Nigeria’s continuing power supply challenges, raises concerns about the fairness and justification of the decision. After all, electricity supply remains erratic, and the promise of stability following previous tariff hikes has yet to be realised. This leaves many Nigerians wondering whether another price increase is truly warranted when the service remains unreliable.
Meanwhile, the Nigerian Communications Commission (NCC) has also approved a 50 percent hike in telecom tariffs, which will affect everything from calls to data and SMS services. This decision comes on the back of Nigeria’s inflation rate, which soared to an alarming 34.8 percent as of December 2024. For many Nigerians, the new pricing structure, which increases the cost of calls, data, and SMS, will further strain already tight budgets. The minimum cost for calls, for instance, is set to rise from N6.40 to N9.60 per minute, with the price for 1GB of data surging from N287.5 to N431.25.
Although this marks the first major adjustment in telecom tariffs in nearly 12 years, it represents a significant burden for consumers, especially considering the industry’s increasing operational costs, worsened by the devaluation of the naira and higher energy costs.
While the operators, including MTN, Airtel, and Globacom, argue that these hikes are necessary for the sustainability of their businesses and to finance infrastructure upgrades, such arguments do little to ease the financial pain of the average Nigerian.
With a large portion of the population relying on mobile phones for essential services such as business transactions, social connections, and even educational purposes, the hike in telecom tariffs risks deepening the digital divide, limiting access to vital communication services.
Critics of the electricity tariff increase, including notable figures such as Professor Adeola Adenikinju, a Professor of Energy Economics, have voiced concerns that the timing and rationale behind the hike are flawed.
Adenikinju, who is also the president of the Nigerian Economic Society, has pointed out that the promise of reliable electricity following the last tariff increase remains unfulfilled. For many Nigerians, the electricity supply remains erratic, undermining confidence in the sector. Furthermore, with inflation already eroding purchasing power, any additional cost burden will only serve to worsen the economic hardship being experienced by the populace.
The Campaign for Democratic and Workers’ Rights (CDWR) has similarly condemned the tariff increases, describing them as an unjustifiable move that will further escalate the cost of living and disrupt economic activities, particularly for workers and business owners. From their perspective, these increases are an unwelcome addition to a long list of economic challenges faced by ordinary Nigerians.
While proponents of the telecom tariff increase argue that the extra revenue generated will allow telecom operators to invest in necessary infrastructure, improve service quality, and expand network coverage, particularly in rural areas, the question remains: at what cost? The reality is that the hike in telecom prices will likely reduce affordability for many consumers, exacerbating the digital divide.
This is particularly concerning in a country where mobile phones serve as a critical tool for economic participation and access to information. The Nigerian government now faces a critical challenge. While it must ensure the viability of key sectors such as energy and telecommunications, it must do so in a way that does not unduly burden the most vulnerable members of society.
There must be a careful balance between the needs of service providers and the ability of the population to pay for these essential services. Transparency from telecom operators in their pricing structures and greater collaboration between industry stakeholders, including government agencies, operators, and consumer advocacy groups, will be key to navigating these challenges.
In the case of electricity tariffs, it is imperative that the government does not simply view these price hikes as a revenue-generating mechanism but also as part of a broader strategy to address systemic inefficiencies within the sector.
If these increases are to be implemented, they must be accompanied by tangible improvements in service quality, reliability, and overall energy infrastructure. As we move forward, a more thoughtful and equitable approach must be taken—one that ensures that any sectoral reforms serve the broader interest of the population and not just the operators.
It is essential that the government reconsiders these tariff increases and explores alternative solutions that balance the need for sustainable growth with the realities of the economic hardship facing the average Nigerian. Ultimately, a thriving telecom and energy sector must not come at the expense of the most vulnerable.
