- Nigeria pays ₦30 billion in electricity subsidies, a reduction from the previous ₦50 billion
Nigeria’s Minister Power Sale Mamman has stated that the Federal Government pays at least ₦30 billion in electricity subsidies monthly. Mamman, who disclosed this in a document on the power sector’s status and progress, said the subsidy payments by the Federal Government had reduced from the previous amount of ₦50 billion paid earlier this year.
Mamman noted that the reduction in the subsidies resulted from the improvement in the revenue collection by the distribution companies. ”Tariffs rose by 36 per cent from September 2020. Collections have grown by 60 per cent plus”, Mamman said. ”Government subsidy has been reduced by N20bn per month. Record collections of N65bn hit in December 2020 cycle (from an average of N39bn)”, he added.
In a recent report, the World Bank noted that subsidy payments by the Federal Government do not get to the intended beneficiaries. ”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 said.