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Nigerian Govt Spends N30 billion On Electricity Subsidy

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Nigerian Govt Spends N30 billion On Electricity Subsidy

The Federal Government’s spending on subsidising electricity per month in the country has reduced by 40 per cent as it is now paying N30 billion monthly.

The Federal Ministry of Power, in a document on the progress and overview of Nigeria’s power sector, said subsidy on electricity had been reduced by N20 billion monthly.

It said the reduction was achieved as a result to the improvements in the collection of power tariffs by distribution companies (Discos), which has increased by about 60 per cent.

The Minister of Power, Sale Mamman, had in February this year said stated that the Federal Government was subsidising electricity supply across the country to the tune of over N50bn monthly.

He explained that the subsidy was being paid to ensure that energy was always available to all Nigerians irrespective of their social status.

The said minister said the funds were provided to augment the shortfall by the distribution companies (DisCos) who had failed to pay for the electricity supply wheeled to them.

Mamman had explained that the subsidy spending was because the government was worried by the incessant complaints by ordinary Nigerians over the unavoidable and periodic increase in the cost of electricity.

He added that following a minor increase in the tariff regime, the subsidy decreased but still constituted a serious drain on the nation’s economy.

Providing explanation on the state of electricity market collections, the document read, “Tariffs rose by 36 per cent from September 2020. Collections have grown by 60 per cent plus.

“Government subsidy has been reduced by N20bn per month. Record collections of N65bn hit in December 2020 cycle (from average of N39bn).”

The Nigerian government also subsidises Premium Motor Spirit (petrol) despite calls against this by both local and international organisations and experts.

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