Tough Times Ahead As FG Set To Remove Subsidy On Electricity

The federal government on Wednesday announced that it cannot “continue to sustain electricity subsidy”.

The Minister of Power, Adebayo Adelabu said the new development came after N450bn allocated to the power sector for subsidy could not service the ministry demands of over N2trn n
for subsidy.

Recall that the International Monetary Fund (IMF) In its report titled ‘IMF Executive Board Concludes Post Financing Assessment with Nigeria,’ reiterated the importance of eliminating the fuel and electricity subsidies to redirect resources towards more targeted and impactful social welfare programmes.

However, Adelabu in Abuja said the nation must begin to move towards a cost-effective tariff model as it is currently indebted to the tune of N1.3tn to generating companies (GenCos) and $1.3bn owed gas companies.

He said, “On the grid that has collapsed about six times between December 2023 and now was caused by a shortage of gas, ageing machines in the grid value chain, low capacity to evacuate generated power, and destruction of power stations in some parts of the North-East geopolitical zone of the country.

“State governments will now be allowed to generate power independently to supply power to their states”.

The power minister noted that the Transmission Company (TCN) of Nigeria has over 100 abandoned projects due to variations in contract figures as a result of the fluctuations of the forex, hence the company will not award any new contracts till all such projects are completed.

According to him, “Over N50bn has been earmarked in the 2024 budget to build mini-grids to supply power to remote areas”.

However, he warned electricity Distribution Companies (DisCos) to sit up otherwise anyone found wanting will have his licence withdrawn.

The minister also added that discussion is ongoing with the National Security Adviser, Nuhu Ribadu to help provide security for power infrastructure.