Nigeria’s power sector is facing a significant financial challenge as its debt surged to N3.3 trillion, with the cost of electricity subsidy nearing N3 trillion, according to recent announcements by the Federal Government.
Minister of Power, Adebayo Adelabu, revealed these alarming figures during a press conference held in Abuja.
The mounting debt includes N1.3 trillion owed to electricity generating companies and a substantial $1.3 billion owed to gas producers.
Adelabu underscored the urgent need for Nigeria to transition to a cost-effective tariff model. He stressed the gravity of the situation, noting that the country’s inability to sustain power subsidies was becoming increasingly evident.
The minister clarified that efforts were underway by the ministries of power, finance, and petroleum to address the crisis plaguing the power sector.
However, he dismissed calls for his resignation despite mounting pressure from various quarters.
One of the primary reasons behind the power crisis experienced in January was the cessation of gas supply by suppliers due to the sector’s outstanding debts.
Gas suppliers halted deliveries until outstanding payments were settled, causing a significant drop in power generation and supply nationwide.
Adelabu also raised concerns about the viability of continuing electricity subsidies, pointing out that the allocated budget of N450 billion falls far short of the N2.9 trillion required to sustain the subsidy at current levels.
He urged stakeholders to confront the reality of the situation and explore viable solutions to ensure the sustainability of the power sector amidst mounting financial challenges.
