FG’s electricity subsidy has surged by 269%

2 weeks ago

The Federal Government’s electricity subsidy has surged by 269%, rising from ₦650 billion in 2023 to an estimated ₦2.4 trillion in 2024.

This increase comes despite implementing the Band A tariff service category in April, which was expected to reduce subsidy obligations by ₦1.14 trillion.

Dr Yusuf Ali, Commissioner for Planning, Research, and Strategy at the Nigerian Electricity Regulatory Commission (NERC), revealed this during a presentation at PwC’s Annual Power and Utilities Roundtable in Lagos on Friday.

Speaking on “Reigniting Hope in Nigeria’s Electric Power Sector,” Dr Ali said, “So right now, the best estimate that we have for 2024 is that the cumulative subsidy for the year will be ₦2.4 trillion,”

“Without the tariff reforms implemented between 2020 and 2023, annual subsidies would have risen significantly, especially amidst the macroeconomic shocks of the past 20 months,” he added.

Minister of Power, Chief Adebayo Adelabu, represented by his Chief Technical Assistant, Adedayo Olowoniyi, highlighted the government’s efforts to address the challenges in the power sector.

“To ensure the sustainability of the energy sector, the Federal Government of Nigeria has implemented a multi-pronged approach spanning across legislation with the enactment of the Electricity Act 2023, policy framework with the development of an Integrated National Electricity Policy, and infrastructure development programmes to expedite expansion,”

“Our successes have not been without challenges. We have recorded frequent grid disturbances and dips in supply levels due to ageing infrastructure, resource limitations, capacity inadequacies, and consistent vand@lism of transmission networks,” he said.

To address these issues, the government has implemented short-term measures, such as enhancing maintenance plans for critical substations, replacing outdated equipment, and conducting data-driven analysis to prevent disruptions.

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