Nigerians are expected to pay higher electricity tariff from July 2020, the Minister of Power, Sale Mamman has insisted.
Mamman disclosed this in his presentation at an investigative public hearing on: “Power Sector Recovery Plan and the Impact of COVID-19 Pandemic” organized by the Senate Committee on Power, in Abuja.
The Minister noted that the controversial increase would have taken effect in April 2020 but was postponed till July 2020 due to the present COVID-19 pandemic and widespread “apathy” towards the increase by Nigerians.
Mamman said: “The impact of the COVID-19 pandemic has also affected our laid out plan for the repositioning of the electricity market towards financial sustainability under the Power Sector Recovery Programme (PSRP).
“Initially, the regulator, following the completion of public consultation on tariff review, planned on conducting a tariff review in April 2020.
“However, due to COVID-19 and customer apathy, the proposed tariff review was delayed by 3 months.
“The impact of this means the subsidy being incurred in maintaining the current tariff level had to be maintained till July 2020 when the proposed tariff review will be implemented.”
He noted that the challenge the nation’s power sector is currently facing in the development and expansion of the nation’s transmission line is to “budget and release FG’s commitment of an estimated sum of N32billion, primarily for Right of Way acquisition and environmental impact mitigation.
“The fund should be provided for in the 2020, 2021, and 2022 Appropriation of the Ministry of Power.”
He added that the power sector is also grappling with the challenge of infrastructural misalignment, market inefficiency/transparency, sector governance/policy coordination, increase energy access and completion of legacy projects.
He said: “Note that the teething issues as well as the legacy issues affecting the power sector is primarily an issue of infrastructural deficit and lack of coordination in the sector.
“We believe solving two challenges alone, would not only redress these challenges, but will also unlock the Sector for investment, efficiency and service delivery, bringing affordable and stable power to the nation.
“It is thus fortuitous that President Muhammadu Buhari has championed the Siemens Electrification Plan under the Presidential Power Initiative, as the central theme of the Government’s strategy in the Sector.
“I believe that all efforts rendered by the many relevant stakeholders within the stakeholders should be aligned with the PPI for maximum effectiveness in implementation.
“It is really our only choice to once and for all resolve the longstanding issue of the Power Sector.”
He lamented further that the COVID-19 pandemic, has had a great economic impact – not just on the health sector, but the overall economy of the country.
He added:”Indeed, the prevalence of the pandemic has already reduced productivity due to the strategy adopted globally to contain it.
“This by default affects the purchasing power of consumers and the demand for electricity in general.
“The current situation in the Nigerian Power Sector is that in which a lot of capital investment is being made, most of which is dependent on donor funding, loans and budgetary allocation.
“For projects that we have already secured their funding, we do not expect any adverse effect.
“However, for those that require our counterpart funding in the face of dwindling national revenue, we are proactively seeking strategies that will enable us anticipate the impact and plan for it so as to enable us deliver within the projected timelines.
“This explains our prayer for the Distinguished Senators to consider and approve additional funding for the execution of the various projects we are undertaking.”
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