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Judicial Activism and the Politics of Electricity Tariff Increase



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By Felix Ayanruoh

The Nigerian people wont’ have the opportunity to enjoy the benefits of the recent power sector reform if our courts don’t exercise restraint in the review of plethora of lawsuits filed pursuant to the recent electricity tariff increase in the country. A Lagos Federal Hight Court recent decision re-affirming the existing order restraining the Nigerian Electricity Regulatory Commission (NERC) from any upward review of electricity tariff can at best be described as a step towards judicial activism – economic intervention.

The plaintiff, Mr. Adebiyi, in the substantive suit, among other reliefs is seeking an order of court restraining NERC from implementing any upward review of electricity tariff without a meaningful and significant improvement in power supply in the country.

The late United States President, Franklin D. Roosevelt cautioned the American people of the dangers of judicial activism to economic development. In a March 9, 1937 radio “fireside chat,” quoting a US Supreme Court Justice Stone , observed that a majority of Supreme Court justices had been reading into the Constitution their own “personal economic predilections.” There was a general consensus among historians and legal scholars, that activist judges tortured the US Constitution in order to take control of the American economy during the 1880’s and maintain that control for four or five decades. The court was alleged to have acted as the nation’s economic policy czar – resulting to most of the US economic grief in the era from 1890 to 1937, including the Great Depression.

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Judicial activism as a legal system explicitly or impliedly empower the courts to interpret the provisions of our laws in an expansive way responding to changes in the social space. Judicial activism beyond interpretation of the laws is contrary both to democratic legitimacy and wise policy development in the world divergent values and interest. The pressure on our courts for the inclusion of electricity regulation – tariff increase through judicial activism is to some degree, the product of 2 intersecting developments.

The first is lack of antitrust or anti-competition laws. In monopolistic industries such as the electricity sector, antitrust (economic regulation) corrects the behavior of participating firms by inhibiting its production quantity, quality, and price decisions. The basic purpose of the antitrust laws is to protect competition from predatory business practices by ensuring that fair competition exists in an open market economy, thereby increase the welfare of, and ensure fairness to consumers by protecting competition against the abuse of dominant positions, and collusive practices. If we had antitrust laws and an economic regulatory agencies such as the US Antitrust Division of the US Department of Justice, the dispute would have been less profound.

The second and most germane development is the lack of political will by the President Jonathan’s administration to effectively address the issues of meaningful tariffs structure and bankability of the power sector infrastructural transactions. The government was under pressure to set tariffs that defiles all economic indices. This lack of political will resulted in the federal government granting bailout facility to both generating and distribution companies to settle legacy gas debt among others.

As a proponent of the principles of individual rights and dignity in interpreting our laws, sees the use of Judicial activism in developing economic regulatory policy in the power sector as missing the mark of justice and equity. I will therefore call for a restraint by the judiciary in handling these cases, as the improvement and success of the power sector reform depends on market forces and not the court room.

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