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FG borrowed $1.3 trillion in four years to fund shortfalls
- Consumers pay less for consumption
- GenCos and gas suppliers paid from funds
The World Bank report on Nigeria titled ”Resilience through Reforms” has shown that the Federal Government (FG) borrowed at least ₦1.3 trillion to make up for the market shortfalls. The FG borrowed to pay the Generation Companies (GenCos) and gas suppliers; the report states that it would cost the FG a further N3.08 trillion to fund these shortfalls in the next two years if the remittance levels continue to fall below expectations.
On the tariff shortfalls, the FG paid at least ₦1.68 trillion in electricity subsidies. The report notes that electricity consumers do not pay the true price of electricity in the country. The subsidies benefit the rich and not the intended recipients, the poorer consumers. ”Significant resources spent on funding tariff shortfalls disproportionately benefit the relatively wealthy who have access to the grid and use more electricity so that ultimately, a big chunk of government support goes to those who do not really need help with paying bills”, the report read.
43 per cent of Nigerians, according to the report, lack access to electricity.