Nigerians should prepare for another increase in electricity tariffs in the coming months, says Olu Verheijen, Special Adviser to President Bola Tinubu on Energy.
Speaking at the Africa Heads of State Energy Summit in Dar es Salaam, Tanzania, Verheijen emphasized that Nigeria’s power prices must rise by about 66 percent to reflect the actual cost of electricity supply.
Her remarks came just weeks after the federal government approved a threefold tariff hike for Band A customers on April 3, 2024.
In Verheijen’s word, “One of the key challenges we’re looking to resolve over the next few months is transitioning to a cost-efficient but cost-reflective tariff. So the sector generates revenue required to attract private capital, while also protecting the poor and vulnerable.”
The presidential aide stressed the need for higher electricity tariffs to ensure maintenance, improve service reliability, and attract private investment in power generation and transmission.
However, she noted that subsidies would be maintained for less-affluent consumers.
Nigeria’s power sector, she explained, requires substantial investment to meet its development goals. Of the country’s 14-gigawatt installed power capacity, only eight gigawatts can be transmitted nationwide, with just four to five gigawatts reaching homes and businesses.
“Your energy policies have to be closely linked with your own ambition for your country,” Verheijen said.
“Our own ambition is to be a $1 trillion economy in five years and to move to an upper-middle income country in 25 years,” he added.
According to Bloomberg, Nigeria presented a $32 billion plan at the World Bank-backed summit to expand electricity access by 2030.
Private investors are expected to contribute $15.5 billion, with the rest coming from public sources, including the World Bank and the African Development Bank (AfDB).
