- The federal government expects that tariff collection will increase to ₦100 billion in the short to medium term.
- The government believes that this will enable it to totally stop subsidy payments to the sector by the end of the year.
- The government intend to spend between $2.5 billion to $3 billion in the sector over the next two years.
The federal government said that with the Central Bank of Nigeria (CBN) intervention in the electricity sector, it is expecting that tariff collection will increase to ₦100 billion in the short to medium term. The government believes that this will enable it to totally stop subsidy payments to the sector by the end of the year.
Mr Ahmad Zakari, Special Adviser to President Muhammadu Buhari on Infrastructure, while peaking during the Abuja Chamber of Commerce and Industry (AICC) web conference, also noted that it has steadily reduced the monthly payments to the sector, especially with the implementation of the Service Reflective Tariffs (SRT) last September. He stated that since the CBN stated warehousing remittances, the collection efficiency of the DisCos has improved remarkedly.
Read also: CBN Intervention Records Success.
Zakari stated that the administration is refocusing its subsidy funding from consumption-oriented spending to infrastructures that will lead to growth. Zakari noted that the government intend to spend between $2.5 billion to $3 billion in the sector over the next two years. It is hoped that within 12 months, these investments will increase the wheeling capacity of the Transmission Company of Nigeria (TCN) to over 7,000MW from 4,900MW.
“With this enhanced metering on the service-based tariff, we can see the Nigerian electricity supply industry generating over ₦100 billion in the near to mid-term. This is very impressive. The hypothesis that we have is that if you enhance payment discipline through metering the population, revenue will go up. We have proven that” he stated.