The Minister of Power, Mr. Sale Mamman, has said the federal government will go ahead with the planned increment in electricity tariffs from July.
Mamman spoke yesterday in Abuja at the Investigative Public Hearing on Power Sector Recovery Plan and the Impact on COVID-19 Pandemic, organised by the Senate Committee on Power.
He expressed concern that the impact of the COVID-19 pandemic has also affected the plan for the repositioning of the electricity market towards financial sustainability under the Power Sector Recovery Programme.
According to him, the Nigerian Electricity Regulatory Commission (NERC), following the completion of public consultation on tariff review, initially planned a tariff review in April.
Mamman, however, said due to the COVID-19 outbreak and customers’ apathy, the proposed tariff review was delayed by three 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.
“The challenge we are currently facing in the development and expansion of our transmission line is budget and release of federal government’s commitment in the estimated sum of N32 billion, primarily for Right of Way acquisition and environmental impact mitigation. The fund should be provided for in the 2020, 2021 and 2022 Appropriations of the Ministry of Power,” he stated.
The minister added that the COVID-19 pandemic has had an economic impact not just on the health sector, but the overall economy of the country.
“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 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,” he said.
He, however, explained that the ministry was canvassing strategies to identify projects that would require counterpart funding in the face of dwindling national revenue with a view to delivering within the projected time.
He said: “This explains our prayer for the senators to consider and approve additional funding for the execution of the various projects we are undertaking.”
Mamman added that the power sector is facing the challenge of infrastructural misalignment, market inefficiency/transparency, sector governance/policy coordination, increase energy access and completion of legacy project,
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.