The Nigeria Electricity Regulatory Commission (NERC) has stated that a total overhaul is required in the power sector if the hike in electricity tariffs is reversed, News About Nigeria reports.
The Chairman of NERC, Sanusi Garba, made this known on Thursday while speaking at a stakeholders meeting in Abuja.
He noted that without a total sectoral overhaul, including fluctuations in foreign exchange, power supply in Nigeria would continue to pose a challenge.
He also disclosed that the federal government will need about N3.2 trillion in 2024 to reverse the recent hike in electricity tariffs.
Speaking at the meeting, which was convened by the House of Representatives Committee on Power, Garba stated that current investment in the sector, though commendable, was not good enough to guarantee a steady power supply across the country.
He explained that before the recent review of tariffs, distribution companies were only obligated to pay 10 percent of their energy invoices, adding that the lack of cash backing is creating a liquidity challenge in the sector.
Garba maintained that sitting back with folded arms would not do the sector any good.
“If sitting back and doing nothing is the way to go, it would mean that the National Assembly and the Executive would have to provide about N3.2 trillion to pay for subsidy in 2024.”
“Only N185 billion of the N645 billion subsidy in 2023 has been cash-backed, leaving a funding gap of N459. 5 billion,” he stated.
Speaking also, Chairman of the House Committee on Power, Victor Nwokolo, PDP, Delta, stated that the essence of the meeting was to address the recent increase in tariffs and the various bands to which electricity consumers were recently categorised.
