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FG to end N30bn monthly electricity subsidy next year
Modupe Shodeinde
The Federal Government has disclosed plans to end most of its subsidy payments in the electricity sector estimated at N30 billion monthly, next year.
Vice President Yemi Osinbajo, gave the hint while speaking on Monday at the opening of the 14th Nigerian Association for Energy Economics/IAEE conference in Abuja with the theme: ‘Strategic responses of the energy sector to Covid-19 impacts on African economies.
According to the the Vice President, who was represented by the Special Assistant to the President on Infrastructure, Engr. Ahmad Zakari, said the government expects the electricity sector to generate its revenue from the power sector market.
He noted that the government would be investing over $3 billion in the coming years to improve transmission and distribution infrastructures across the country.
He explained that the effort of President Buhari’s administration to reform the energy sector would ensure that the sector continues to play a critical role in the growth of the country’s social and economic wellbeing.
He said: “Electricity tariff reforms with the service based tariff has led to collections from the electricity sector by 63 per cent increasing revenue assurance for gas producers and stabilizing the value chain.
“It is anticipated all electricity market revenues will be obtained from the market with limited subsidy from next year as reforms in metering and efficiency with the DisCos continue to improve.
“Accelerated investment in transmission and distribution, over $3 billion will be out into this sub-segment of the electricity value chain that will put us on the path to delivering 10 gigawatts through the interventions of the Central Bank of Nigeria, Siemens partnership, World Bank and Africa Development Bank, and others”.
He stressed that as the electricity sector continues to be stabilized, more power is needed for the country’s large population.
“That is why this administration continues to invest in generation to cater for our current and future needs,” he said.
