Stakeholders call for better use of electricity subsidy fund

THE staggering 700 billion naira spent in 2023 to subsidise electricity has prompted stakeholders to advocate the exploration of alternative uses of the resources currently allocated to electricity tariff subsidies.

The Minister of Power had recently, during his working tour of power facilities in Nigeria to the Ibadan Electricity Distribution Company ( IBEDC), said the federal government had spent N700 billion to subsidise electricity last year. He said the government continues to subsidise electricity as current charges are not cost- reflective.

However, stakeholders have emphasised that sustaining electricity subsidies is not viable. They rather called for subsidising generation as it ensures the full realisation of economic costs associated with making electricity accessible to consumers.

Speaking with The Guardian, Executive Director of Powerup Nigeria, Adetayo Adegbemle, said despite the N2 trillion subsidies paid since 2015, there has been minimal private sector investment in the sector. He urged the federal government to take a quick decision before the situation spirals out of control like the petrol subsidy. "Another issue facing the electricity market is the delay and bottlenecks associated with paying the electricity subsidies as well as the slow cycle of the electricity market. The subsidies are funded from various pools such as the budget appropriation, FG commitments domiciled at the Federal Ministry of Finance, World Bank guarantees and loans as well as CBN facilities," he said.