Nigeria’s electricity sector is grappling with a worsening debt crisis, with the federal government allocating only N450 billion for subsidies in 2024, despite the Nigerian Electricity Regulatory Commission (NERC) approving a subsidy of N2.3 trillion for the year.
The funding shortfall has been cited as a key reason for the lack of investment in the sector, resulting in persistent power outages.
Truthlive news learnt that Bolaji Tunji, media aide to Minister of Power Adebayo Adelabu, revealed this in an interview with The Punch.
He noted that the subsidy gap has hindered the minister’s promise to deliver 6,000 megawatts of electricity by December.
“One of the key issues has been the cash backing of the subsidy, which relates to debt owed to generation and gas companies. This year’s subsidy will be approximately N2.3 trillion, but only N450 billion was budgeted. Another issue has been the fragility of the transmission grid due to vandalism,” Tunji explained.
Looking ahead to 2025, the government plans to increase budget allocations for electricity subsidies and invest in infrastructure upgrades. “We have a committee focused on revamping ageing equipment, and budget allocations to the Ministry of Power and its agencies have been increased to support infrastructure investments,” Tunji said.
He emphasized that private sector participation remains critical, as it will provide the capital needed to overhaul the sector.
Tunji highlighted some progress made under the current administration, noting an increase in electricity generation from 4,000 megawatts to 5,231 megawatts by November 2024. However, the government’s efforts were hampered by vandalism of critical infrastructure.
The Transmission Company of Nigeria disclosed it had spent N8.8 billion to repair and restore 128 vandalized transmission towers across the country as of November 2024.
Tunji reaffirmed the government’s commitment to improving power supply, stating, “We are not resting on our oars to ensure additional supply to the grid.”