The Federal Government of Nigeria has revealed that it will spend approximately N2.4 trillion on electricity subsidies by the end of 2024, as confirmed by Dr. Yusuf Ali, the Nigerian Electricity Regulatory Commission’s (NERC) Commissioner for Planning, Research, and Strategy.
The disclosure was made during the PwC’s Annual Power and Utilities Roundtable in Lagos on Thursday, where Ali explained that the subsidy amount had fluctuated due to factors such as foreign exchange challenges and tariff adjustments.
As of November 2024, the subsidy stood at N1.9 trillion, with a projected increase to N2.4 trillion by December, reflecting an expected monthly subsidy of N260 billion. Ali emphasized that this estimate could change based on the difference between the cost-reflective tariff and the approved tariff, with monthly calculations determining the exact subsidy amount.
In addition to the subsidy figures, the Minister of Power, Adebayo Adelabu, represented by his Chief Technical Adviser, Adedayo Olowoniyi, highlighted ongoing efforts to overhaul the nation’s power sector.
Adelabu underscored the importance of implementing cost-reflective tariffs to ensure investment in the sector and its long-term sustainability. He noted that without a clear return for investors, the sector would struggle to attract the necessary capital for growth.
Adelabu also acknowledged the sector’s ongoing challenges, including vandalism, aging infrastructure, and inefficiencies. For instance, the Transmission Company of Nigeria had spent nearly N10 billion over six months repairing damaged transmission towers.
Despite these challenges, Adelabu highlighted the government’s focus on improving infrastructure, including the construction of new substations and the upgrading of existing transmission networks, under initiatives like the Electricity Act of 2023 and the Presidential Power Initiative in partnership with Siemens.
He further discussed the development of the Integrated National Electricity Policy, a joint effort with PwC, aimed at addressing the critical challenges facing the power sector. The policy is designed to improve market discipline, enhance energy delivery efficiency, and ensure that subsidies benefit the most vulnerable members of society.
The Minister called for collective action from all stakeholders to restore confidence in the sector and deliver a sustainable energy future for Nigerians. He emphasized that the road to 24-hour electricity and universal access would require bold and innovative solutions.
