The Minister of Power, Adebayo Adelabu, has issued a warning during a recent appearance before the Senate Committee on Power in Abuja saying that unless the proposed electricity tariff hike is implemented, the nation could face a severe power crisis within the next three months, potentially resulting in a nationwide blackout.
Adelabu stressed the critical need for the tariff increase to prevent the collapse of the power sector, citing the immense financial challenges it currently faces.
Adelabu said, “The entire sector will be grounded if we don’t increase the tariff. With what we have now in the next three months, the entire country will be in darkness if we don’t increase tariffs.”
“The increment will catapult us to the next level. We are also Nigerians, we are also feeling the impact.”
He highlighted that an annual investment of $10 billion over the next decade is necessary to revitalize the nation’s power infrastructure and address its persistent issues effectively.
However, he acknowledged the government’s limited resources, making it imperative to attract private investment through commercial pricing.
The minister underscored that without adequate tariff adjustments, investors would be deterred from participating in the sector, hindering its growth and development.
“So, for us to attract investors and investment, we must make the sector attractive, and the only way it can be made attractive is that there must be commercial pricing.”
“If the value is still at N66 and the government is not paying subsidy, the investors will not come. But now that we have increased the tariff for A Band, there are interests being shown by investors,” he said.
He pointed out that the recent tariff hike for certain consumer categories has already generated interest from potential investors, signaling a positive step towards attracting much-needed capital.
Adelabu also addressed the government’s inability to settle the outstanding subsidy debt of N2.9 trillion, attributing it to financial constraints.
He appealed to lawmakers for support in addressing this issue and ensuring the sustainability of the power sector.
In response, the Senate Committee on Power, led by Senator Enyinnaya Abaribe, expressed concerns about the potential impact of the tariff increase on ordinary Nigerians.
They emphasized the importance of exploring alternative solutions to alleviate the burden on consumers while ensuring the sector’s financial viability.
Several senators highlighted the lack of adequate consultation prior to the tariff hike and called for measures to be put in place to provide relief to consumers.
Abaribe specifically condemned the absence of the company “ZIGLAKS,” which had received substantial funding over the years for the provision of prepaid meters but failed to deliver on its promises.
The investigative hearing also included presentations from various stakeholders, including the Nigerian Electricity Regulatory Commission (NERC), the Manufacturers Association of Nigeria (MAN), and the Association of Power Generation Companies (Gencos), among others.
These presentations offered insights into the complex challenges facing the power sector and underscored the urgent need for comprehensive solutions to ensure its long-term sustainability and effectiveness in meeting the nation’s energy needs.
