The President, Major General Muhammadu Buhari (retd.), says it will be “grossly irresponsible” to borrow to subsidise electricity tariff amid the economic crunch caused by the lockdown occasioned by the COVID-19 pandemic.

He also said no provision was made for fuel subsidy in the Revised 2020 Budget, noting that about N1.7trn has been spent on tariff shortfalls to support the electricity sector since its privatisation.

The President, who spoke on Monday during his second-term First Year Ministerial Performance Review Retreat in Abuja, noted that under the new arrangement, only customers who get electricity for 12 hours and above per day would have their tariff increased.

Buhari had won his re-election in 2019 after defeating the opposition Peoples Democratic Party’s candidate, Atiku Abubakar, with about four million votes in the February 23 poll.

He had on August 21, 2019, inaugurated his second-term cabinet and had last month listed 35 policies, programmes and projects as his second-term achievements.

The First Year Ministerial Performance Review Retreat focuses on examining the performance of the ministers and other officials in the President’s cabinet.

Buhari, who is attending the 57th Ordinary Session of the Economic Community of West African States Authority of Heads of State and Government in Niger, was represented at the retreat on Monday by Vice-President Yemi Osinbajo.

He said, “The COVID-19 has led to a severe downturn in the funds available to finance our budget and has severely hampered our capacity. One of the steps we took at the beginning of the crisis in March when oil prices collapsed at the height of the global lockdown was the deregulation of the price of premium motor spirit such that the benefit of the lower prices at the time was passed on to consumers.

“The effect of the deregulation is that pump prices of petrol will change with the changes in global oil prices. This means quite regrettably that as oil prices go higher, we could see some increases in pump price. This is what has happened now when global prices rose, it meant that the prices of petrol locally will also go up.

There are several negative consequences if the government should go back to the business of fixing or subsidising petroleum or PMS prices.

First of all, it will mean a return to the costly subsidy regime. Today, as we’ve heard, we have 60 per cent less revenue. We simply cannot afford the cost.

“The second danger is the potential return of fuel queues which has thankfully become a thing of the past. Nigerians no longer have to endure long queues just to but petrol often at highly inflated prices.

“Also, there is no provision for fuel subsidy in the revised 2020 budget simply because we are not able to afford such a cost.

“If reasonable provision must be made for health, education, and other social services, we simply cannot sustain petroleum subsidies.”

Continuing the President said, “The recent service-based tariff adjustment by the discos has also been a source of concern to many of us. Let me say frankly like many Nigerians, I have been very unhappy with the service by many of the discos. But there are many constraints including poor transmission and distribution capacities. I’ve already signed off the first phase of the Siemens Project to address many of these issues.

Because of the problems of the privatisation exercise, the government has had to keep supporting the largely privatised electricity industry. So far, to keep the industry going, we have spent close to N1.7trn especially by way of supplementing tariff shortfalls. We simply do not have the resources at this time to continue in this way. And it will be grossly irresponsible to borrow to subsidise generation and distribution which are both privatised.”

He also stressed that “the timing of these two necessary adjustments” was coincidental, assuring Nigerians that the government was not insensitive to their plights and would continue to do all it can to make life better for the masses.

Source: https://punchng.com/borrowing-to-subsidise-electricity-grossly-irresponsible-fg/

That sadly is what we have been doing for a long time.

Time we faced the reality and stopped

Though the leadership too is to blame. Diversifying the economy or at least cutting subsidies in petrol and paying it for power may help the poor somewhat.

Amid growing concerns over Nigeria’s debt profile, the Minister of Finance, Budget and Planning, Mrs Zainab Ahmed, has said the dual reality of COVID-19 pandemic and the drop in the price of oil in the international market has made it inevitable for Nigeria to keep borrowing from external bodies.

https://www.google.com/amp/s/punchng.com/why-nigeria-cant-stop-borrowing-ahmed-finance-minister/%3famp=1

When did you start subsidising electricity? Thought your government said "Nigeria have not borrowed enough" and "Nigeria can not stop borrowing"? So you know understand that it's economically irresponsible to continue borrowing yet have long dragged this nation into chronic indebtedness? Debt servicing is not debt payment.

So after saying subsidy is a fraud, yet you continued to pay same for years.After promising one year one refinery but failed to fulfil same, the NNPC is just churning out debts as none of the existing refineries are functioning optimally despite the huge TAM & other overhead costs.No diversification from oil economy as billions are wasted prospecting for an illusive oil up north.Just cluelessness & incompetency on display.

You were not subsidizing Electricity but paying GENCOS for any Electricity thieving DISCOS rejected to the tune of 700 billion naira a year ...

But borrowing to buy cars for senators

Borrowing to loot

Frustrating citizen nko

All these are responsible abi..


Can't we just terminate all these people like Ghana did..

Lol, this people are funny sha. At the end of the year, they will still come to tell us how they spend trillions in numerous subsidies.
This jamboree government still have 3 years left to fatten themselves

I

Damnnnnn niggarrr
Isoright

He didnt say it jor, he cannot pronounce grossly or irresponsible

APC as a whole is Irresponsible

GamalNasser:
You were not subsidizing Electricity but paying GENCOS for any Electricity thieving DISCOS rejected to the tune of 700 billion naira a year ...

Yes, they were paying subsides for the power sector because that was the structure they met in place which was enshrined in law by the previous government

The previous government, while privatizing power, put in place a system whereby discos were forced to charge below the cost of production of electricity

This put discos in a difficult situation. As a result, they had to keep on rejecting power because they have been making losses due to the fact that it costs 53 naira to produce one kWh of power, yet discos had to sell it between 21 to 30 naira.

So the current government ended up paying discos subsides of a trillion naira each year, partly with loans to prevent them from losing money and collapsing. Even then it isn't enough because that just covers the difference between the cost of production and selling power

Of course, the current government could not reverse the system without falling into legal issues

Slight correction, subsides on power between 2015-18 amounted to a trillion naira , not trillion annually. The error is regretted

The truth is this country is not working again.

Until we all are serious and shutdown this country, things will continue to deteriorate.

But you said that you don't believe in subsidy

Says d head of d most irresponsible govt ever... Let him explain to us what subsidy and under-recovery is

If we put sentiments aside we will see that his argument is very valid but it will have been acceptable if the hardship the ordinary Nigerian is already facing isn't already very high. In this very hard times the priority should be what is good for 'Nigerians' not what is good for 'Nigeria'

The people who are meant to be in this corntree, are those benefiting from it. If you're not making any substantial benefit from it, I'd advise that you run...

FG talking to who?

You guys can't borrow money for stable electricity but you can borrow money for cars and renovation of assembly house.

Incompetent people

The end is near

Have you guys ever considered taking pay cuts as a way to raise revenue. You never want to make sacrifices but you are ready to put a heavy burden on the average Nigerian with your stupid economic logic.

Suddenly a Buhari govt that claimed to be socialist in nature in 2015 is now going full capitalist. Removing subsidies and all that.

Keep deceiving yourselves and your stupid gullible band of Zombies you call supporters

Meanwhile, borrowing to loot is quite responsible.

Someone that never believed subsidy existed is now lecturing us.

kikero:
That sadly is what we have been doing for a long time.
Time we faced the reality and stopped
Though the leadership too is to blame. Diversifying the economy or at least cutting subsidies in petrol and paying it for power may help the poor somewhat.

Really?
Where are those who said we should not stop in 2012?
Can someone please look for them and summon them here


www.nairaland.com/attachments/6455791_img20171223213452227_jpegaba3147253e469fb84a244a27892199c


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www.nairaland.com/attachments/4265598_jonna_jpegfe17099f252ec13d86a2923ee4df9197

He is right. Nigeria should made away with all this subsidy things. It's just an avenue to steal and it doesn't make sense to the economy. If you know you know

Racoon:

https://www.google.com/amp/s/punchng.com/why-nigeria-cant-stop-borrowing-ahmed-finance-minister/%3famp=1

When did you start subsidising electricity? Thought your government said "Nigeria have not borrowed enough" and "Nigeria can not stop borrowing"? So you know understand that it's economically irresponsible to continue borrowing yet have long dragged this nation into chronic indebtedness?

After saying subsidy is a fraud,yet continued to pay same for years.After promising one year one refinery, NNPC is just churning out debts as none of the existing refineries are functioning optimally despite the huge TAM & other overhead costs.No diversification from oil economy as billions are wasted prospecting for an illusive oil up north.Just cluelessness & incompetency on display.

They paid subsides because Nigerians wanted it and because if they didn't, we would have been paying 200 naira for a liter of fuel by 2015. If not more

( Of course, removing subsidy would in the long term be good for the economy, which was why APC was silly in protesting pdps removal in 2012)

An irresponsible government with irresponsible issues

For a blessed country like Nigeria, with proper resource management, there is no reason to borrow at all.

The end of all corrupt Nigerian politicians is near. APC or PDP.

He's right

Its like talking to yourself...

It is more grossly irresponsible for governments to charge Nigerians for their inefficiencies by not being able to fix refineries after so many billions of Naira and paying for what's is not consumed in the name of estimated billings.