Power Minister, Adebayo Adelabu, assured Nigerians on Friday that the current high electricity tariffs are a temporary issue and will eventually decrease, akin to the trend seen in telecom tariffs in the country.
Addressing criticism from consumers about recent tariff hikes and poor power supply, Adelabu expressed optimism about the future.
“Though it seems costly now, I am confident these tariffs will reduce,” he stated during the presentation of his ministerial scorecard in Abuja.
Drawing parallels with the early telecom industry, Adelabu recalled, “We remember the high costs of SIM cards and phones when telecoms first arrived. Over time, those costs significantly dropped. The same will happen with electricity generation, transmission, and distribution prices.”
READ ALSO :Farooq Kperogi : Nigeria’s economic apartheid in electricity consumption
Adelabu highlighted improvements within the electricity distribution companies (DisCos), crediting enhanced oversight by the Nigerian Electricity Regulatory Commission (NERC). He also noted the introduction of a guaranteed service level for Band A customers, ensuring a minimum of 20 hours of supply daily, a first in Nigeria.
Advertisements
The government is also trialing a cost-reflective tariff system and improving liquidity conditions to attract investments, initially applying these measures to 15% of its customers. “For the first time, we have a guaranteed service level for Band A customers, ensuring 20 hours of supply and introducing tariffs that reflect actual costs, thereby encouraging investment,” Adelabu said.
The reforms in the Nigerian Electricity Supply Industry (NESI) have begun to attract significant investments, including $500 million from the Nigerian Sovereign Investment Authority (NSIA) and $750 million from the World Bank. Adelabu attributed this progress to the Electricity Act 2023 and President Bola Tinubu’s reform agenda, which have made the sector more appealing to investors by addressing uninspiring tariff policies and significant debt issues.
Adelabu assured that the power sector has seen marked improvements over the past year, stating, “Power has improved. We are no longer where we were in February, and we are moving in the right direction.”
In the coming months, the Federal Government plans to award contracts for the provision of 1.5 million meters to Meter Asset Providers, funded by the World Bank. This initiative aims to enhance liquidity in the sector and reduce the reliance on estimated billing. Over the next five years, the government aims to deploy 10 million meters, with an annual target of 2 million.
The Minister also mentioned efforts to settle the N47.19 billion debt owed by Ministry Departments and Agencies (MDAs) to the DisCos through the Nigerian Electricity Liability Management Company (NELMCO). This centralized approach aims to prevent the accumulation of new debts and resolve existing liabilities.
Additionally, DisCos under the management of the Assets Management Company of Nigeria (AMCON) and the banks have been given a deadline to transfer management to core technical operators. The ministry is also working on a World Bank project to implement the Supervisory Control and Data Acquisition (SCADA) system within 24 months, which will enable the National Control Center to monitor the national grid and prevent collapses.