Nigeria’s Minister of Power, Chief Adebayo Adelabu, has called for the removal of electricity subsidy, saying they are unsustainable and detrimental to the country’s power sector.
Adelabu made these remarks during his inspection tour of some of the National Independent Power Plants (NIPPs) in Ogun and Ondo states.
The minister appealed to the federal government to either fund the subsidies promised to the market or scrap them altogether, maintaining that the subsidies were creating liquidity problems in the sector and leading to huge debts owed to the power generating companies and the gas suppliers.
He said Nigerians should be ready to pay more for electricity, as they do in other West African countries.
“And we also want to appeal to the federal government that once there is a subsidy promise, it has to be fully funded. If our government is not ready to fund subsidies, it is actually better for us to migrate to a fully-cost-reflective tariff, because liquidity is a major issue in the sector, which has led to a huge debt being owed power generating companies.
“And once they are owed, they are also unable to pay the gas suppliers. When the gas suppliers are not paid, they will be unwilling to supply regular gas to them.
“So where are these debts piling up? Where are they coming from? Part of it are the Discos are owing some portion of these debts while the federal government is also owing a huge portion of these debts, which relate to the unfunded portion of the subsidy that they pledge.
“So, I will do everything within my capacity. I have already had a meeting with the honourable Minister of Finance and Coordinating Minister of the Economy as well as the honourable Minister of Budget and National Planning, and the Special Adviser to the President on Energy, on how we can fund the outstanding subsidy unpaid by federal government,” he added.
