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FG, World Bank at loggerhead as Nigeria spends $1.5b on electricity

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As the Federal Government spends nothing less than $1.5b to meet the shortfall in the nation’s electricity sector, Special Adviser to the President on Infrastructure, Ahmad Rufai Zakari, Monday said the survey conducted by the World Bank, which claimed that 78 per cent of power consumers in Nigeria get less than 12 hours of daily supply of electricity was baseless.

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While the World Bank had revealed that the Nigeria government is currently subsidising the power sector with about $1.5 billion, especially due to tariff shortfall, Zakari had told The Guardian that the recently introduced Service-Based Tariff, which increased electricity bills for end-users improves the liquidity in the market by about N65 billion in January this year.

The World Bank has last week told journalists that Nigeria has the largest number of people without access to electricity in the world, adding that the sector has been recording a yearly revenue loss of about $29 billion.

The Federal Government however insisted that it was unclear what empirical evidence the World Bank used to arrive at the figures, insisting that power distribution to consumers has been steadily improving.

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In 2013, Nigeria had privatised the electricity sector aiming at a turning around the industry but the sector has failed to perform seven years after. Federal Government had last year increased the electricity tariff on the promise that there would be an improvement in supply but the service has been dismal following a series of challenges that impede generation capacity.

Zakari said it was inaccurate for the World Bank to make a blanket statement that 78 per cent of Nigerians have less than 12 hours daily access to electricity, arguing that empirical evidence from the Nigerian Electricity Regulatory Commission (NERC) shows that only 55 per cent of citizens connected to the grid are in tariff bands D and E which are less than 12 hours supply.

“It is inaccurate to make a blanket statement that 78 per cent of Nigerians have less than 12 hours daily access. The data from NERC is that 55 per cent of citizens connected to the grid are in tariff bands D and E which are less than 12 hours supply. Those citizens are being fully subsidized to pre-September 2020 tariffs until DIsCOs are able to improve supply. There is a N120 billion CAPEX fund from CBN for DIsCOs to improve infrastructure for these tariff classes similar to the metering program that is ongoing,” Zakari said.

He also insisted that the claim by the apex bank that 58 per cent of electricity consumers in the country do not have meters to measure electricity use was unverifiable.

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“It is unclear who did this survey and what the timeframe is. All citizens that have gotten free meters report they are happy about the reform trajectory. To date more than 600k meters have been delivered to DISCOs out of the 1 million in phase 0 with installation ongoing. Meters are sourced locally and are creating jobs in installation and manufacturing/assembly.”

“All consumers have been communicated their bands and bands are published during billing. It is inconceivable that anyone would imply that 4 out of 5 Nigerians are not intelligent enough to understand tariff classes and what they are paying for,” Zakari said.

Speaking on the improvement in the sector since the tariff was increased, Zakari said SBT raised aggregate average tariffs by 36 per cent as collections by DISCOs in the sector went up by above 60 per cent.

“We had a record of N65 billion in NESI collections in the January billing cycle and have maintained a high rate,” he noted.

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