Naira Depreciation Pushes Electricity Subsidy To N2.9trn — Power Minister

The federal government needed no less than N2.9 trillion to subsidise electricity consumption in 2024 due to the sharp depreciation of the Naira. This is a sharp increase over the earlier projection of N1.6 trillion.

The Minister of Power, Adebayo Adelabu, who revealed this, urged the federal government to either fund the subsidy or allow cost-effective tariff to prevail.

Adelabu, who addressed a press conference in Abuja on Wednesday, said only N450 billion was budgeted for subsidy this year but the ministry needed about N2.9 trillion for subsidy.

He also said the country is currently indebted to the tune of N1.3 trillion to power generating companies (GenCos) and $1.3 billion owed gas companies.

He said state governments will now be allowed to generate power independently to supply power to their states.

On the grid that has collapsed for about six times between December 2023 and now, he said this was caused by 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.

He said the Transmission Company of Nigeria (TCN) has over 100 abandoned projects due to variations on contract figures as a result of the fluctuations of the forex, hence the company will not award any new contract till all such projects were completed.

The minister also said over N50billion has been earmarked in the 2024 budget to build mini-grids to supply power to remote areas.

He said electricity distribution companies (DisCos) should sit up, otherwise anyone found wanting will have his licence withdrawn.