The Nigerian government can no longer afford to heavily subsidize electricity tariffs and must transition to a cost-reflective pricing model, according to the Minister of Power, Adebayo Adelabu.
The country is currently grappling with mounting debts of 1.3 trillion naira owed to power-generating companies (GenCos) and $1.3 billion owed to gas suppliers.
Addressing a press conference in Abuja on Wednesday, Adelabu revealed that while only 450 billion naira was budgeted for electricity subsidies this year, the ministry requires over 2 trillion naira to sustain the current level of subsidization.
To alleviate the financial burden, the minister announced that state governments will now be allowed to independently generate and supply power within their respective states.
Adelabu attributed the recent spate of national grid collapses, which have occurred six times between December 2023 and now, to a combination of factors, including gas shortages, aging infrastructure in the power sector value chain, low capacity for evacuating generated power, and the destruction of power stations in some parts of the North-East geopolitical zone.
The minister also emphasized the need for electricity distribution companies (DisCos) to improve their performance, warning that underperforming companies could have their licenses revoked.
Adelabu further revealed that he has reached out to the National Security Adviser, Nuhu Ribadu, to ensure the provision of adequate security for power infrastructure.
