Mohammed Shosanya
The Institute of Chartered Accountants of Nigeria (ICAN) has advised the Nigeria Electricity Regulatory Commission (NERC) and electricity distribution companies to shelve the implementation electricity tariff hike in the country
Nigerians are still grappling with the effect of macroeconomic policy decisions such as the removal of petrol subsidy,unification of the foreign exchange rates and increasing electricity tariff now will unsettle them,Dr. Innocent Okwuosa, President of the Institute,said in a statement on Thursday.
ICAN,he said,has reviewed the applications for a minor review of electricity tariff by seven Discos (Electricity Distribution Companies), and presents its findings on the challenges faced by the Discos as well as areas for improvement in their application.
The Institute has also presented its recommendations on how to improve transparency, fairness, and accountability in the electricity sector.
According to him,the increase would significantly increase the cost of doing business; particularly for small and medium enterprises and that these enterprises may be unable to pass on the additional costs to their customers.
The development will increase the risk of business closures, and further worsens unemployment rate in Nigeria,he said.
He also stated that the government and NERC should consider additional short-term tax breaks and other incentives to the Discos, as a form of production-focused subsidy (rather than consumption-focused subsidy), as an alternative to rate hike.
He added:“The Discos would however need to demonstrate better accountability and transparency in governance and reporting. This is an area in which chartered accountants can provide valuable support.
“The Discos should invest further in their distribution network to reduce technical losses and build a platform for sustainable electricity distribution.
“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.
“The Institute of Chartered Accountants of Nigeria stands ready and offers its support to the commission in its efforts to ensure transparency, fairness, and accountability in the electricity sector”
