The Federal Government’s yearly electricity subsidy has increased by 269 percent to ₦2.4 trillion in 2024, up from ₦650 billion in 2023. This is despite the installation of the Band A tariff service category in April, which is anticipated to cut the government’s subsidy requirement by ₦1.14 trillion. Dr. Yusuf Ali, Commissioner for Planning, Research, and Strategy at the Nigerian Electricity Regulatory Commission (NERC), said this during his presentation at PwC’s Annual Power and Utilities Roundtable in Lagos on Friday.
Speaking on “Reigniting Hope in Nigeria’s Electric Power Sector,” Dr. Ali stated that between 2023 and 2024, macroeconomic shocks, particularly foreign exchange instability, succeeded in raising cost-reflective charges by 118%, while yearly subsidies grew by 270%. Dr. Ali stated that by increasing tariffs in April 2024, the government intended to dramatically eliminate subsidies, but the country’s macroeconomic circumstances had a detrimental influence on tariff payment.
He highlighted that without the tariff adjustments enacted between 2020 and 2023, annual subsidies would have increased dramatically, particularly in light of the macroeconomic shocks of the previous 20 months.
He went on: “So right now, the best estimate that we have for 2024 is that the cumulative subsidy for the year will be 2.4 trillion.” According to Chief Adebayo Adelabu, Minister of Power, the current administration in Nigeria, led by President Bola Tinubu, has acknowledged electricity as the backbone of economic growth and job creation under the renewed hope agenda.
The Minister, who was represented by his Chief Technical Assistant, Adedayo Olowoniyi, said: “To ensure the sustainability of the energy sector, the Federal Government of Nigeria has implemented a multi-pronged approach spanning across legislation, with the enactment of the Electricity Act 2023, policy framework, with the development of an Integrated National Electricity Policy, the introduction of national infrastructure development programs is to expedite all infrastructure.
“Our triumphs have not come without hurdles. We have recently experienced frequent grid disturbances and a drop in supply levels due to a variety of factors, including ageing infrastructure, resource constraints, capacity inadequacy across the value chain, and, most notably, consistent vandalism on transmission networks across the country.
“We are actively solving these difficulties to assure nationwide energy security and sustainability. “In the short term, we have implemented measures such as reinforcing standard operating procedures, developing detailed maintenance plans for key transmission substations, conducting data-driven line tracing on frequently tripping lines, replacing outdated equipment at critical stations, and assessing the integrity of key nodes to prevent future disruptions.
“For long-term strategies, we are finalising plans for a supergrid project to create a more robust and resilient grid system.
“Today’s theme reminds us that hope is not a passive sentiment, but an active commitment and we must continue to innovate, collaborate, and implement bold ideas to restore confidence in our sector to deliver an energy future where every Nigerian has access to reliable, affordable, and sustainable power.”
