By NewsDesk
The Association of Waste Managers of Nigeria (AWAMN) has called on the government to implement a cost reflective tariff in the waste management sector, warning that the industry may collapse without urgent intervention.
Speaking to the News Agency of Nigeria (NAN) in Lagos, the President of AWAMN, Mr. Olugbenga Adebola, said that the survival of waste management businesses hinges on their ability to recover operational costs in line with prevailing economic realities.
“Cost recovery is sine qua non to the preservation of any business,” Adebola said. “Effective and efficient waste management cannot be achieved without a cost reflective tariff. Any business that is not charging cost reflective tariff will die a natural death.”
He compared the current state of the waste sector with other industries that have embraced cost reflective pricing models.
“That is why the telecommunications companies, DSTV, even the GENCOs of this world are charging cost reflective tariffs,” he said. “GENCOs adjust their charges based on exchange rates and inflation. But in our sector, that’s not the case.”
Adebola expressed frustration over stagnant tariffs despite skyrocketing operating costs, particularly for diesel, a major component in waste collection logistics.
“The last increment in low-income areas was in 2022 when diesel was N600 per litre. Today, it has peaked at N1700 and now hovers around N1300, thanks to the Dangote Refinery,” he noted. “Yet, there has been no increase in what is chargeable for waste services.”
He said every aspect of the waste management value chain, from trucks to hydraulics, is affected by the forex crisis.
“We signed an MoU to bring in over €50 million for infrastructure – for waste treatment, recycling, and trucks. But if there’s no cost recovery, how do you repay the loan?” he asked.
Adebola also dismissed the government’s subsidy efforts as inadequate, given the scale of financial needs in the sector.
“Some operators get N200,000 to N500,000 in subsidies depending on their location. But a single truck tire costs N400,000. What good is that subsidy?” he questioned.
Using Lagos as a case study, Adebola revealed that running a single waste truck for one trip costs between N167,000 and N180,000, with diesel alone consuming a large chunk of the expenditure.
“Meanwhile, the fee collected to load a truck is sometimes less than N70,000. How do you survive that? These are the issues. Tenements must pay,” he stressed.
He concluded by calling on policymakers to review the existing pricing framework and support the waste management sector before it crumbles under the weight of unsustainable costs.