The Federal Government of Nigeria is spending $1.5bn (N568.5bn at N379/$ exchange rate) annually to fund electricity tariff shortfalls, the World Bank has said. According to the global financial institution, this amount could further increase if the country fails to take the right action.
The bank disclosed this in its enlarged report on Nigeria Power Sector Recovery Programme obtained by our correspondent in Abuja on Sunday.
“FGN (Federal Government of Nigeria) is spending $1.5bn per year to fund tariff shortfalls and this could continue to rise if action isn’t taken,” the bank stated in the document.
The World Bank said Nigeria’s power sector was operationally inefficient with unreliable supply exacerbated by high losses and lack of payment discipline.
Picking on the various arms of the sector, the bank stated that power generation was characterised by high non-available capacity due to the fact that many plants were out on fault, damage, maintenance, major overhaul, etc.
“Gas and transmission constraints lead to non-operational capacity”.
Resolving policy/regulatory challenges and Disco (distribution companies) issues are key to free up stranded capacity,” the bank stated.
In the transmission sector, the bank said infrastructure in this arm of the industry remained inadequate and congested, stressing that investments in upgrades and maintenance were required.
Punch
DISCLAIMER
The OPINION / COLUMN is authored by independent contributors to the National Accord Newspaper. While contributors adhere to our editorial guidelines, they are not employed by the National Accord Newspaper. The perspectives and opinions expressed herein are solely those of the author and do not represent the views of the National Accord Newspaper or its staff.
Leave a Reply