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The Nigerian federal government now requires a minimum of N2.9 trillion to subsidize electricity consumption in 2024, a significant increase from the earlier projection of N1.6 trillion.
The Minister of Power, Adebayo Adelabu, revealed this during a press conference in Abuja. He emphasized that only N450 billion was provided for electricity subsidy in the 2024 budget, but the ministry would need about N2.9 trillion for subsidy at the current exchange rate.
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Adelabu urged the government to either fund the subsidy or allow a cost-effective tariff to prevail. The Nigerian Electricity Regulatory Commission (NERC) had earlier announced that tariff reviews would be conducted monthly due to the volatility of the exchange rate and inflationary pressures.
The minister highlighted the roadmap for stabilizing the power sector, including settling outstanding sectoral debts to Gas Supply and Power Generation companies, increasing investments in infrastructural improvements, diversifying power generation to absorb renewables, encouraging distributed power strategies, and allowing state governments to generate power independently.
Adelabu also mentioned that over 50 billion naira has been earmarked in the 2024 budget to build mini-grids to supply power to remote areas.
He addressed the challenges facing the power sector, including gas shortages, aging machines, low capacity to evacuate generated power, and destruction of power stations in some parts of the country.
The Transmission Company of Nigeria has over 100 abandoned projects due to variations in contract figures caused by fluctuations in forex rates. The company will not award new contracts until all such projects are completed.
