During a visit to Ikeja Electric’s headquarters, Minister of Power, Adebayo Adelabu, made a compelling case for ending power subsidies, citing that citizens of neighbouring African countries pay significantly more for electricity than Nigerians do.
Adelabu stressed that Nigerians would be willing to pay higher tariffs if they received commensurate power supply, emphasizing the need for increased investment in infrastructure by power distribution companies (Discos).
Expressing concern over the reluctance of some Discos to invest in critical infrastructure, Adelabu highlighted the government’s intent to enforce legislation mandating capitalization to drive essential investments.
He underscored the capital-intensive nature of the power sector, urging Discos to prioritize high-impact infrastructure investments to boost revenue and improve service delivery.
Addressing concerns over low power supply due to gas constraints and increased demand amid rising temperatures, Adelabu acknowledged the challenges faced by consumers but emphasized the inevitability of transitioning to full cost-reflective tariffs over the next three years.
With neighbouring countries like Guinea, Togo, Mali, and Ivory Coast paying more than double for electricity, Adelabu believes Nigerians would support tariff adjustments in exchange for reliable and consistent power supply.
“A lot of our distributors are satisfied with the status quo. There are some high-impact investments you can make in infrastructure that will double your fortune. It translates to increased revenue for you. Some discos are not ready to put in any money; they are just satisfied with getting their monthly stipend.
“We will not allow that. That is why we are saying that if by persuasion, we cannot achieve it, we will achieve it through legislation. We are looking at capitalization requirements for Discos, which will compel them to pay more funds.
“Power business is highly capital intensive. It requires a lot of investments and infrastructure, and the investment can never be lost. It will also transform into sales and revenue for Discos. So we believe that our Discos must be ready to invest in high-impact infrastructure.”
However, he acknowledged the hurdles of energy theft and asset vandalism, calling for collaboration with the Minister to tackle these pressing issues plaguing the electricity sector.
Adelabu’s recommendation comes at a time when Nigerians are still grappling with worsening economic hardship occasioned by the removal of fuel subsidy, which has significantly contributed to high inflationary pressures on goods and services.
