The Minister of Power, Adebayo Adelabu, has said that the Federal Government can no longer subsidize electricity in the country.
Adelabu in a press conference in Abuja on Wednesday, said the country must begin to move towards a cost-effective tariff model, as the country is currently indebted to the tune of 1.3 trillion naira to generating companies (GenCos) and 1.3 billion dollars owed gas companies.
The Federal Government confession is coming barely three days after the International Monetary Fund (IMF) asked the federal government to completely phase out petrol and electricity subsidies in the country.
The IMF made the recommendations while advising Nigeria on pathways to restoring macroeconomic stability in its ‘Post Financing Assessment (PFA)’ report.
Speaking during the press conference, Adelabu said only 450 billion naira was budgeted for subsidy this year but the ministry needs over 2 trillion naira for subsidy.
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 that the Transmission Company of Nigeria 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 contracts till all such projects are completed.
The minister also said over 50 billion naira has been earmarked in the 2024 budget to build mini grids to supply power to remote areas.
He stressed that electricity distribution companies (DisCos) should sit up otherwise anyone found wanting will have his licence withdrawn.
The minister also said he has reached out to the National Security Adviser, Nuhu Ribadu to help provide security for power infrastructure.
Unable to stomach the IMF prescription, Human Rights Activist and a Senior Advocate of Nigeria, Mr Femi Falana criticised the global financial institution and pleaded with the Federal Government to jettison the “deleterious policies” of the Bretton Woods institutions like IMF and the World Bank.
He also said the government should reduce its reliance on their economic predictions and policies.
Source: Channels TV (with slight modification)
