FG’s Electricity Subsidy Soars 269% to ₦2.4trn in 2024
The Federal Government’s annual electricity subsidy has surged by 269%, reaching ₦2.4 trillion in 2024, compared to ₦650 billion in 2023. This increase comes despite the introduction of the Band A tariff service category in April, which was expected to cut the subsidy by ₦1.14 trillion. Dr. Yusuf Ali, Commissioner for Planning, Research, and Strategy at the Nigerian Electricity Regulatory Commission (NERC), revealed these figures during his presentation at PwC’s Annual Power and Utilities Roundtable in Lagos on Friday. He attributed the 270% rise in subsidies to macroeconomic challenges, particularly instability in foreign exchange, which led to a 118% increase in cost-reflective tariffs between 2023 and 2024. While tariff adjustments in April 2024 aimed to reduce subsidies, Dr. Ali noted that the country’s economic conditions hindered tariff payments. He also highlighted that without tariff reforms between 2020 and 2023, the subsidy burden would have grown significantly due to the economic shocks over the past 20 months. Minister of Power, Chief Adebayo Adelabu, represented by his Chief Technical Assistant, Adedayo Olowoniyi, emphasized that the current administration recognizes energy as key to economic growth and job creation. He outlined the government’s multi-faceted approach to ensuring energy sector sustainability, including the enactment of the Electricity Act 2023 and the development of an Integrated National Electricity Policy. Despite these efforts, challenges such as aging infrastructure, resource limitations, and transmission network vandalism have led to frequent grid disturbances and supply dips. The Minister assured that both short-term measures, like maintenance and equipment upgrades, and long-term strategies, such as the super grid project, are being implemented to ensure energy security and sustainability.
