Adebayo Adelabu, the minister of power has said that Nigeria would require at least $10 billion every year for the next 10 years to revive the power sector, a critical aspect to drive the country’s economy.
Adelabu said this when he appeared before the Senate Committee on Power for an investigative hearing on electricity tariff hike on Monday in Abuja.
Adelabu, while describing as shameful the state of Nigeria’s “underperforming” power sector with only 4000 Mega Watts generated for decades, pointed out that the government cannot provide the needed funds, hence the need to make the sector attractive to investors and bank lenders.
“For this sector to be revived, the government needs to spend nothing less than 10 billion dollars every year for 10 years, because of the infrastructure requirements for stability in the sector, but the government cannot afford to do that, it must make the sector attractive to investors and to lenders. The business must be attractive, there must be commercial pricing”, he said.
He noted that the $2.9 required sum for subsidy is only a paltry sum. He noted that the tariff hike for band A customers will generate about N1.15 trillion, which still leaves the government with about N1.7 trillion to cover the subsidy shortfall, as only N450 billion was provided in the budget for 2024.
The minister emphasized that the hike in tariff was crucial especially as government was not paying the required subsidy for the sector, but said it was only the beginning of reforms needed in the sector.
The Nigeria Electricity Regulatory Commission in early April raised electricity tariffs for customers enjoying at least 20 hours of power supply daily, categorised as Band A. The increase saw customers paying N225 kilowatt per hour from N66, a development that has been heavily criticised by many Nigerians.
