During a press conference in Abuja, Nigeria’s Minister of Power, Adebayo Adelabu, acknowledged the immense difficulty in maintaining subsidies on electricity within the country. He cited the staggering indebtedness of the power sector to electricity-generating and gas companies, which has surpassed N3 trillion.
Mr. Adelabu highlighted the substantial debt owed to power generating companies (GenCos) and gas suppliers (GasCos), amounting to N1.3 trillion and N2 trillion, respectively. This accumulated legacy debt poses a significant obstacle to the sector’s progress and sustainability.
While efforts are underway to address these financial challenges, Mr. Adelabu underscored the need for transparency and informed public discourse regarding the state of the power sector. He emphasized the government’s commitment to resolving outstanding debts through various means, including cash injections and debt instruments.
Regarding electricity subsidies, Mr. Adelabu pointed out that neighboring countries such as Ghana, Togo, and Benin Republic pay higher tariffs for electricity. He questioned the feasibility of continuing subsidies in Nigeria, given the substantial financial burden it imposes.
In the 2024 budget, the government allocated N450 billion for electricity subsidies, which represents less than 20% of the nearly N3 trillion required to sustain current subsidy leadevels.
