In Nigeria High electricity bills threatens e-commerce growth

High electricity bills threatens e-commerce growth

dimeji akinloye

January 5, 2016 1:09 AM

In defending the increment in tariffs, the executive director of ANED, Sunday Oduntan, explained how electricity debt by consumers pile up.

High electricity bills threatens e-commerce growth

E-commerce business owners have bemoaned the high cost of electricity in the country, which they say militates against the development of the sector.

In view of the ongoing economic crisis and the resolve of electricity providers to even increase tariffs, e-commerce companies face serious challenges of survival and growth.

Reacting to the issue, managing director of Jovago Nigeria, Kushal Dutta, lamented the huge amount of money the company spends on buying diesel to power generators on a 24-hour basis.

“One of the highest cost e-commerce companies in Nigeria cover is electricity. Because online-based business need constant power supply to function and deliver services to clients, we spend a bulk of our revenue which should go into increasing operations on buying diesel for generators that run almost 24 hours each day.

“Although we predict better market opportunities for the sector, there is need to curb this inflation in tariff pricing so investing companies can begin to thrive and achieve real growth”, he said.

The Association of Nigerian Electricity Distributors (ANED) had disclosed that less than 40 percent of electricity bills are paid by consumers which has necessitated the need for higher tariffs so as to plug the loss in power revenue.

In defending the increment in tariffs, the executive director of ANED, Sunday Oduntan, explained how electricity debt by consumers pile up.

“I’ve toured all the 11 Discos and I see the same pattern across board in terms of our peoples’ attitude with respect to the payment of electricity bills. You give a bill of N5,000 and they’ll pay N2,000 and will tell you they will clear it next time. This is how it continues to pile up," Oduntan said.

However, many consumers also argue that if electricity is constantly provided, people would pay for usage. Some blame the attitude of inconsistent electricity bill payment on the epileptic power supply.

It is believed that the cost of doing business in Nigeria in the next three months would double, given the removal of fuel subsidies and oil marketers refusing to sell diesel at pump prices - especially as oil hits a benchmark price of $38 per barrel with the International Monetary Fund (IMF) predicting a further drop to $20 per barrel by mid-year.

dimeji akinloye