Bureaucracy is stalling the proposed 50 percent electricity subsidies for public hospitals as there is yet a lack of coordination between the Nigerian Electricity Regulatory Commission (NERC) and the federal government.
Last month, Tunji Alausa, minister of state for health, announced that President Bola Tinubu had approved a subsidy for healthcare facilities in response to growing calls for government intervention to mitigate the crippling impact of high energy costs on hospitals’ operations.
He said the initiative would support mainly federal teaching hospitals, leaving out private hospitals that have led various advocacy for special electricity tariffs.
However, the NERC told BusinessDay on Wednesday that there was no separate plan to cut electricity tariff for hospitals as suggested by the federal government.
“We have not received any communication from the federal government regarding an electricity subsidy for hospitals. We haven’t,” Usman Arabi, NERC head of public affairs, said.
Meanwhile, hospital directors are keenly awaiting the implementation of the subsidy directive as many of them bear high electricity costs since the tariff increased by over 300 percent.
The University College Hospital (UCH) Ibadan was disconnected from the electricity grid by the Ibadan Electricity Distribution Company (IBEDC) earlier this year due to an unpaid debt of nearly N500 million, disrupting healthcare services for the city’s population of over three million.
Since May, the Lagos University Teaching Hospital (LUTH) has been experiencing frequent and unexpected power outages, coupled with a monthly electricity bill of around N280 million, which is 21.7 percent higher than the total electricity bill of the entire University of Ilorin.
John Okeniyi, chief medical director (CMD) of Obafemi Awolowo University Teaching Hospital Complex (OAUTHC), lauded the initiative, noting that Alausa had confirmed it at a recent meeting of the committee of CMDs in Abuja.
He believed the subsidy would significantly reduce operational costs for hospitals nationwide, stating, “Electricity is crucial for the efficient functioning of OAUTHC and other healthcare institutions across the country.”
Wasiu Adeyemo, CMD of LUTH, said he is awaiting the electricity bills for September to confirm if the subsidy would be reflected or not.
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“We have not received the modus operandi, but I’m aware that the government is serious about it and hoping that it gets it done. The government will have to talk to the NERC and pass the message across to us. It is not something difficult,” Adeyemo said.
In response to the question of whether patients can expect lower treatment costs if the subsidy is implemented, Adeyemo stated that the hospital has not increased its charges despite the rising inflation.
Adetokunbo Fabamwo, CMD of Lagos State University Teaching Hospital, told BusinessDay that the subsidy does not extend to the hospital as its power is supplied power by the independent power project (IPP) run by the state government.
However, the IPP developed issues many months ago, forcing the hospital to rely on electricity generators for power.
“We have been spending a lot of money on the purchase of diesel because we cannot shut down. We supply power for an average of 16 hours a day. But all the critical service areas get 24-hour light, one way or the other. All the emergency units, theater, labor ward, neonatal unit, ICU, and intensive care unit get 24-hour power. But for the wards and clinics, we ration power just so that generators can rest,” Fabamwo told BusinessDay.
Apart from implementation, another challenge is the limitation of the subsidy benefits to public hospitals.
Private hospitals are hurt for being left out despite engaging the NERC on subsidies for more than two years.
The Association of Nigeria Private Medical Practitioners (ANPMP), at its 46th Annual General Meeting and International Scientific Conference, had demanded the establishment of a ‘Special Health Sector Electricity Tariff’ to serve as a subsidy for the critical sector.
Kay Adesola, ANPMP president, told BusinessDay that it has had two separate meetings with Muhammad Ali Pate, minister of health and social welfare, and was aiming to meet the minister of power.
But when the directive on subsidy was unveiled, private hospitals were omitted despite providing 70 percent of health services across the country, he said.
The association is however demanding a 75 to 100 percent electricity subsidy, arguing that energy bills constitute more than 40 percent of hospitals’ overhead costs in Nigeria.
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Due to the spiking costs of operation, Adesola revealed that an average of five hospitals have shut down monthly across the country despite having a population with far greater need for more medical facilities and personnel.
The high energy costs, coupled with the exorbitant rate of importing drugs, devices, medical consumables, and equipment have made it difficult for those in business to break even without choking patients with high rates.
“If the government is genuine in its quest to provide subsidy for the public, it should also look towards the private sector which covers about 70 percent of healthcare delivery,” Adesola said.
“The government pays all the bills of public hospitals and still gives them subsidies. Why are we in the private sector not deserving? We have been at this since 2021. Tomorrow, they will tell us to treat any patient rushed in for an emergency for free. We have to face the reality.”
