The Federal Government, through the Nigerian Electricity Regulatory Commission (NERC), has announced plans to spend approximately N2.4 trillion on electricity subsidies by the end of this year. Yusuf Ali, NERC’s Commissioner for Planning, Research, and Strategy, revealed this during the PwC Annual Power and Utilities Roundtable, held in Lagos on Thursday. The event was themed ‘Reigniting Hope in Nigeria’s Electric Power Sector.’
Ali explained that the subsidy amount has fluctuated due to challenges with foreign exchange rates and tariff adjustments. As of November, the subsidy stood at N1.9 trillion, with expectations that it would rise to N260 billion monthly by December.
He clarified that the N2.4 trillion estimate for the year could vary based on actual consumption and tariff trends. “Each month, we calculate the difference between the cost-reflective tariff and the approved tariff to determine the subsidy,” he noted.
The Minister of Power, Adebayo Adelabu, represented by the Chief Technical Adviser to the Minister, Adedayo Olowoniyi, highlighted the development of a draft Integrated National Electricity Policy in collaboration with PricewaterhouseCoopers. The policy aims to address critical issues in Nigeria’s power sector.
Adelabu stressed the importance of implementing cost-reflective tariffs to attract investment and ensure the sector’s long-term sustainability. While acknowledging resistance to such tariffs, he emphasized that they are essential for achieving 24-hour electricity and universal access. He also referenced the administration’s initiatives under the Renewed Hope Agenda, including the Electricity Act of 2023 and the Presidential Power Initiative in partnership with Siemens.
Additionally, Adelabu pointed out several challenges facing the sector, such as vandalism, aging infrastructure, and inefficiencies across the electricity value chain. He revealed that the Transmission Company of Nigeria had spent nearly N10 billion in six months repairing vandalized transmission towers. The minister also mentioned ongoing efforts to improve infrastructure, including building new substations and upgrading transmission and distribution networks.
