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The Federal Government will end the monthly N30billion electricity subsidy and most of its subsidy payment in the nation’s power sector next year.
The government also said by then power sector should have the capacity and ability to fetch its revenue as well as support the market adequately without intervention funds
Vice President Yemi Osinbajo, disclosed these at the opening of the 14th Nigerian Association for Energy Economics/IAEE conference in Abuja on Monday, with the theme: ‘Strategic Responses Of Energy Sector To COVID-19 Impacts On African Economies’.
He said that the government would investing over $3 billion in the later years to improve transmission and distribution infrastructures in Nigeria.
He was represented at the eventb by the Special Assistant to the President on Infrastructure, Engr. Ahmad Zakari .
According to him, the effort of the current administration to reform the energy sector would ensure that the sector continues to play critical role in the growth of Nigeria’s socio-economic growth
He added:“Electricity tariff reforms with the service based tariff has led to collections from the electricity sector by 63 percent increasing revenue assurance for gas producers and stabilizing the value chain.It is anticipated 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 emphasized that as the electricity sector continues to be stabilized, more power is needed for the country’s large population,adding that the development explains why the administration continues to invest in generation to cater for the nation’s current and future needs”.
In his remarks,the Minister of State Petroleum Resources, Chief Timipre Sylva,said pointed out that the Covid-19 pandemic which started last year,had severe impact on the energy sector.
Speaking earlier, Engr. Bello Gusau, the Executive Secretary of the Petroleum Technology Development Fund, PTDF, noted that Covid-19 pandemic has had great impact on the economies of African countries especially those that rely on the export of crude oil.
“Specifically, in Nigeria, where the oil sector accounts for half of the government’s revenue and 90 percent of foreign exchange earnings, GDP growth for oil has not been recovering as expected, a trend that could potentially negative implications for quick economic recovery in a post Covid-19 era”, he added.
Also speaking at event, Prof. Yinka Omorogbe, the President of the NAEE, warned that energy transition and movement towards net zero carbon is real, and 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”, she stated.
Mrs. Omorogbe added: “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”.
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