The Association of Electricity Distributors of Nigeria (ANED) has emphasized that the majority of Nigerians would struggle to afford the actual cost of electricity without the presence of subsidies.
In overview of ANED’s position on electricity subsidies and the implications for Nigeria, the association stated that the Federal Government is committed to providing electricity subsidies until the power industry reaches a point where it can implement a tariff that reflects the real cost.
This assertion follows the recent announcement by the Nigerian Electricity Regulatory Commission (NERC), revealing that the Federal Government disbursed N135.23 billion to subsidize electricity consumption in the second quarter of 2023.
ANED’s Regulatory Specialist, David Adeyeye, underlined the challenges associated with the current foreign exchange market. He explained that due to the ongoing exchange rate, setting the actual cost of electricity in Nigeria would be exceedingly difficult.
Adeyeye elaborated, “Today, as we speak, the naira exchange rate to a dollar is about N1,150. So, if you allow that, the cost of power becomes unsustainable. That is why a cushion that works must be created to ensure Nigerians have access to power because we need electricity to power our economy.”
The message from ANED highlights the essential role of subsidies in making electricity accessible to the Nigerian population, as they face economic challenges linked to the exchange rate.
