Human rights lawyer and Senior Advocate of Nigeria, Femi Falana, on Sunday, alleged that the Federal Government stopped payment of electricity subsidy in 2022.
Falana, in a statement made available to our correspondent, noted that on March 23, 2021, the Federal Government announced its plan to end electricity subsidy by the end of that year.
The lawyer quoted the Special Adviser to former President Muhammadu Buhari on Infrastructure, Ahmad Zakari, as saying “We plan to eliminate subsidy by the end of the year. People will say if you eliminate subsidies, you will have poor people pay more. But our argument is that the only reason the power prices in Nigeria are high is because we don’t generate enough. If you generate 10GW of power, tariff will be half of what it costs. So, keeping the prices very low is not the approach, but delivering adequate power.”
Similarly in the statement, Falana noted that on March 12, 2022, the former Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed that the Federal Government had quietly removed electricity subsidy. The lawyer said Ahmed made the disclosure at a virtual meeting of African Finance Ministers and the International Monetary Fund.
Falana quoted Ahmed in his statement as saying, “We are cleaning up our subsidies. We had a setback; we were to remove the fuel subsidy by July this year but there was a lot of pushback from the polity. We have elections coming and because of the hardship that companies and citizens went through during the COVID-19 pandemic, we just felt that the time was not right, so we pulled back on that. But we have been able to quietly implement subsidy removal in the electricity sector and as we speak, we don’t have subsidies in the electricity sector. We did that incrementally over time by carefully adjusting the prices at some levels while holding the lower levels down.”
Speaking further in the statement, Falana questioned the reason why the incumbent Minister of Power, Mr. Adebayo Adelabu claimed on January 15, 2024, that, “the Federal Government still subsidises electricity because the current tariff DISCOs are allowed to charge is not cost-reflective.”
Recall that last week, the Nigerian Electricity Regulatory Commission approved an increase in electricity tariff to N225 ($0.15) per kilowatt-hour from N68.
The over 240 per cent hike took for urban consumers, also known as Band A consumers in the country, took effect from April 1, 2024.
In justifying the hike, the Minister of Power said the government was subsidising 67 per cent of the cost of generating, transmitting and distributing power in Nigeria, amounting to over N3tn, which he put at 10 per cent of government total revenue.
Falana however said, “From the foregoing, it is undoubtedly clear that the IMF and the Federal Government are juggling figures of electricity subsidy to blackmail and deceive the Nigerian people. Whereas the IMF claims that ‘fuel and electricity subsidy will cost Nigeria N2.33tn’ in 2024, the Federal Government has given a subsidy figure of N3tn from the sum of N700bn allegedly consumed by subsidy in 2023. Curiously, the Federal Ministry of Finance has failed to reconcile the conflicting figures being peddled around by the IMF and Ministry of Power.
“Since the Buhari administration had stopped electricity subsidy in 2022, the Federal Government should institute a panel of inquiry to investigate the claim of the Minister of Power, Adebayo Adelabu that electricity subsidy for 2024 is N3tn. The inquiry is necessary as arrangements have been concluded by the Nigerian Electricity Regulatory Commission to further hike electricity tariffs under the pretext of removing subsidy from the sector. The panel should also inquire into the diversion of the N32bn paid into the account of a private company account in 2003 for the supply of three million prepaid metres in the country.”(Punch)
