The Federal Government will next year end most of its subsidy payments in the electricity sector estimated at N30 billion monthly.

Vice President Yemi Osinbajo, who disclosed this at the opening of the 14th Nigerian Association for Energy Economics/IAEE conference in Abuja yesterday, said the government expected the electricity sector to generate its revenue from the power sector market.

The theme of the conference is ‘’Strategic responses of energy sector to COVID-19 impacts on African economies.’’

Prof. Osinbajo, who was represented by the Special Assistant to the President on Infrastructure, Engr. Ahmad Zakari, noted that government would be investing over $3 billion in the coming years to improve transmission and distribution infrastructure across the country.

He explained that the effort of President Muhammadu Buhari’s administration to reform the energy sector would ensure that it continued to play critical role in the growth of the country’s social and economic well being.

He said: “Electricity tariff reforms with service-based tariff has led to collections from the electricity sector by 63 per cent, increasing revenue assurance for gas producers and stabilizing the value chain.

“It is anticipated that all electricity market revenues will be obtained from the market with limited subsidy from next year as reforms in metering and efficiency with the DISCOs continue to improve.

“Accelerated investment in transmission and distribution, over $3 billion will be out into this sub-segment of the electricity value chain that will put us on the path to delivering 10 gigawatts through the interventions of the Central Bank of Nigeria, Siemens partnership, World Bank and Africa Development Bank, and others.”

He said as the electricity sector continued to be stabilized, more power was needed for the country’s large population.

“That is why this administration continues to invest in generation to cater for our current and future needs,” he said.

Osinbajo charged the participants to come up with solutions to key energy challenges facing the country, especially with the COVID-19 pandemic and energy transition.

Earlier in his remarks, the Minister of State for Petroleum Resources, Chief Timipre Sylva, pointed out that the COVID-19 which took the world by surprise in 2020, had grave impact on the energy sector.

On her part, the President of NAEE, Prof. Yinka Omorogbe, warned that energy transition and movement towards net zero carbon was real, stressing that Nigeria must take steps to align itself with global trend.

“For some, change represents a move away from the warm and welcoming familiar, towards fearful horizons characterised by uncertainty.

“However, a critical consideration of this season will show that it is a period when change cannot be stopped or hijacked, and that survivors will be those with the ability to adapt. It is here to stay for the time being.

“For African countries, which have the problem of low levels of access to modern energy services, and which have no option but to grow their energy industries, this presents a very interesting and-to me- exciting challenge.

“Africa abounds in energy resources- coal, bitumen, crude oil, natural gas, solar energy, wind, tidal and wave energy, geothermal energy etc. The continent is blessed. Unfortunately, these resources have so far not been harnessed so as to unlock their vast potentials for the use of the people.

Again unfortunately, Nigeria has not only come to epitomise the paradox of poverty in the midst of plenty in the energy sector, but also has the strange revenue-draining paradox of being both a major exporter of crude oil and a major importer of petroleum products which are subsidized at a cost that the nation cannot afford,” Mrs Omorogbe said.

In his remarks, the Executive Secretary of Petroleum Technology Development Fund, PTDF, Engr. Bello Gusau, noted that the COVID-19 pandemic had had great impact on the economies of African countries, especially those that relied on the export of crude oil.

“Specifically, in Nigeria, where the oil sector accounts for half of government’s revenue and 90 per cent of foreign exchange earnings, GDP growth for oil has not been recovering as expected, a trend that could potentially have negative implications for quick economic recovery in a post-COVID-19 era,” he added.

jumper524:
The corruption going on in this country, even the common man is part of it.
Until we totally scrap all this subsidies, Nigerians would forever remain lazy and never wake up to realities.
Imagine if fuel subsidy was scraped?
The $300million dollar we spend monthly would be used to develop other sector and maybe the electricity sector would have been more stable hence less consumption of fuel.
More billionaires would build private refineries without political cabals but the truth is that if they should dare venture, they'll be definitely run at a loss..

Guyman02:
Still many citizens are without power even with the subsidy

SpecialAdviser:
What this will translate to is that you will need up to 30k to have power monthly.

If fuel subsidy is also removed, you will be spending up 20k on transport monthly.

Since food price is already high, you need 50k for feeding monthly.

Other welfare you need 20k to maintain monthly.

This gives a total of 120k for an average Nigerian to survive.

If you are doing job that fetch you 60k monthly ,60-120 = -60k monthly

With your debt you are going to either hang yourself or become an armed robber to survive.

Meanwhile, senators are going home with up to 30million monthly.

Looting will also be increased with politicians indulging in all manner of evil ritualism to stay in the game.

Bandits will kidnap more people and even police will shoot more people who refuse to corporate. We all know the evil of subsidy and why it's good to be removed but what about stopping corruption first.

And some mum.us think MNK or Igboho are not fighting a just course. While you slowpoke.s swallow all the nonsense thrown at you, Is it not time you started hailing those fighting to bring about the real change? Shame on all of you.

Beancounter94:


Whereas if we keep subsidy...the power and petrol companies won't be able to make enough profit to make things better...plus no one would come and invest in things like power stations, and the refinereis.

The thing about business....if you don't make a profit...or are not sure of making a profit....you would end up not investing.

If you have Biafra or oodua....both nations would have to run without subsides, or they would be as indebted as Nigeria is. The more you spend on subsides, the more you strain your country's money to pay for the subsides as costs rise.

The GSM we have...there were no subsidies from the word go. People were buying sims at N10000 at the beginning. A v-mobile starter pack in 2002 cost N23000. My first ever SIM in 2004 cost N7000 (MTEL...and that was the cheapest then!) But thanks to no subsidies, the companies mande enough of a profit to build the GSM infrastructure that we have today...and that serves our internet and phones well well. And a SIM costs less than N1000 now.

The same can happen for our power and petrol sector. Yes, we go pay high. Yes things would be hard ...but with more investment and suchlike...prices will come down

We are not earning enough to pay the kind of subsides we had when people like Yaradua and GEJ were in power..and even back then subsides were creating a big dent in our economy to the point that GEJ wanted to get rid of them completely

SpecialAdviser:


If you understood my comment, I was never against it's removal. Am looking at the economy picture at the moment.

With the hardship in place do you think Nigerians can stand it. And why has politicians not tried to limit looting and limit their allowances and salary.

Buhari should learn to take things in proper priority. If am in his shoes, first thing allow imports to bring down commodity prices, fight corruption and then remove subsidy.

Unfortunately his incompetence have driven corruption to a very high level. Again his economy is in shambles. All of a sudden you want to remove subsidy.

Brace up for the deal.

Beancounter94:


Whereas if we keep subsidy...the power and petrol companies won't be able to make enough profit to make things better...plus no one would come and invest in things like power stations, and the refinereis.

The thing about business....if you don't make a profit...or are not sure of making a profit....you would end up not investing.

If you have Biafra or oodua....both nations would have to run without subsides, or they would be as indebted as Nigeria is. The more you spend on subsides, the more you strain your country's money to pay for the subsides as costs rise.

The GSM we have...there were no subsidies from the word go. People were buying sims at N10000 at the beginning. A v-mobile starter pack in 2002 cost N23000. My first ever SIM in 2004 cost N7000 (MTEL...and that was the cheapest then!) But thanks to no subsidies, the companies mande enough of a profit to build the GSM infrastructure that we have today...and that serves our internet and phones well well. And a SIM costs less than N1000 now.

The same can happen for our power and petrol sector. Yes, we go pay high. Yes things would be hard ...but with more investment and suchlike...prices will come down

We are not earning enough to pay the kind of subsides we had when people like Yaradua and GEJ were in power..and even back then subsides were creating a big dent in our economy to the point that GEJ wanted to get rid of them completely