THE CABLE
Adebayo Adelabu, minister of power, says it is difficult for the federal government to continue to subsidise electricity, saying Nigeria’s debt to generation and gas companies is now N3 trillion.
Adelabu spoke at a press briefing in Abuja on Wednesday — two days after the International Monetary Fund (IMF) asked the federal government to completely phase out petrol and electricity subsidies.
In the third quarter (Q3) of 2023, the federal government spent N204.59 billion on electricity subsidy, and plans to expend an additional N1.6 trillion in 2024 to enable citizens to access power at a low cost.
But speaking at the conference, the minister said it “is very difficult to sustain subsidy on electricity”, citing huge debt obligations to operators.
He said the country must begin to move towards a cost-effective tariff model, as it currently owes N1.3 trillion to generating companies (GenCos) and $1.3 billion to gas companies.
Adelabu also said only N450 billion was budgeted for subsidy this year but the ministry needs over N2 trillion for subsidy.
The minister said state governments will now be allowed to generate power independently to supply electricity to their states.
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