Nigeria’s Power Sector at Risk as Minister Calls for End to Electricity Subsidies
N4 Trillion Debt Threatens Industry Collapse
Nigeria’s Minister of Power, Dr. Adebayo Adelabu, has issued a stark warning about the country’s electricity subsidies, stating they must be discontinued to prevent the power sector’s total collapse.
Unsustainable Financial Burden
During critical discussions with Generation Companies (Gencos) in Abuja, Adelabu revealed the federal government currently owes power firms N4 trillion in unpaid subsidies. This massive debt has created severe cash flow problems that threaten the entire sector’s viability.
“Our economy simply cannot sustain these subsidies indefinitely,” Adelabu stated, emphasizing that Nigerians must prepare for a cost-reflective tariff system where consumers pay for actual electricity usage.
Mounting Sector Debt
The power sector’s financial crisis includes:
- N2 trillion in pre-2024 subsidy arrears
- N1.9 trillion accumulated in 2024 alone
Gencos have warned that without immediate payment of these legacy debts, the sector faces imminent shutdown.
Presidential Intervention Planned
Adelabu disclosed plans for a high-level meeting between President Bola Tinubu and power generation companies to address the N4 trillion subsidy debt and find sustainable solutions for the sector.
This development comes as Nigeria grapples with economic challenges that make continued subsidy payments increasingly untenable for the government.
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