- The humongous electricity subsidy is recorded despite the implementation of the Band A tariff service category in April, touted to cut down the government’s subsidy obligation by ₦1.14 trillion
The Federal Government has disclosed that annual electricity subsidy has risen to ₦2.4 trillion in 2024 with the figure representing an astronomical rise of 269 per cent from ₦650 billion in 2023.
The humongous electricity subsidy is recorded despite the implementation of the Band A tariff service category in April, touted to cut down the government’s subsidy obligation by ₦1.14 trillion.
Commissioner for Planning, Research, and Strategy at the Nigerian Electricity Regulatory Commission, NERC, Dr. Yusuf Ali, made the disclosure in his presentation at the PwC’s Annual Power and Utilities Roundtable in Lagos, on Friday.
Speaking on “Reigniting hope in Nigeria’s electric power sector”, Dr. Ali said between 2023 and 2024, macroeconomic shocks, especially foreign exchange volatility, was behind the surge in cost-reflective tariffs by 118 per cent, while annual subsidy increased by 270 per cent.
Dr. Ali said by increasing tariff in April 2024, the government intention was to reduce subsidy significantly, but the country’s macroeconomic environment negatively impacted on tariff payment.
He emphasised that without the tariff reforms implemented between 2020 and 2023, annual subsidies would have risen significantly, especially amidst the macroeconomic shocks of the past 20 months.
He said: “So right now, the best estimate that we have for 2024 is that the cumulative subsidy for the year will be 2.4 trillion.”
On his part, the Minister of Power, Chief Adebayo Adelabu, the present administration in Nigeria, led by President Bola Tinubu, with the renewed hope agenda, has recognised energy as the backbone of economic growth and job creation
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