Olu Verheijen, special adviser to President Bola Tinubu on energy, says Nigeria’s electricity tariff will increase within months.
According to a report by Bloomberg on Friday, the presidential aide spoke at the Africa Heads of State Energy Summit in Dar es Salaam, Tanzania.
On April 3, 2024, the federal government approved a threefold increase in electricity tariff for customers under the Band A classification.
Verheijen explained that Nigeria’s power prices need to rise by about two-thirds (66 percent) for many customers to reflect the actual cost of supplying electricity.
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She also emphasised that higher electricity tariffs must be balanced with subsidies for less-affluent consumers, as they are necessary to fund maintenance, improve reliability, and attract private investors into power generation and transmission.
The presidential aide said Nigeria is trying to resolve the transition to a cost-efficient but cost-reflective tariff to attract private investors.
“One of the key challenges we’re looking to resolve over the next few months is transitioning to a cost-efficient but cost-reflective tariff,” Verheijen said.
“So the sector generates revenue required to attract private capital, while also protecting the poor and vulnerable.”
She also highlighted that Nigeria’s power industry requires significant investment to meet its development goals.
The aide said out of the country’s 14 gigawatts of installed power, only eight gigawatts can be transmitted nationwide, while just four or five gigawatts can be directly delivered to homes and businesses.
“Your energy policies have to be closely linked with your own ambition for your country,” Verheijen said.
“Our own ambition is to be a $1 trillion economy in five years and to move to an upper-middle income country in 25 years.”
According to the report, Verheijen attended the World Bank-backed conference in Tanzania, where Nigeria presented a $32 billion plan to expand electricity connections by 2030.
It further explained that private investors are expected to contribute $15.5 billion, while the remaining funds will come from public sources, including the World Bank and the African Development Bank (AfDB).
