At current tariff, Nigeria subsidizes electricity consumption with N200bn monthly

May 20, 2025

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. Power Minister Adelabu canvasses stricter Anti-Vandalism Laws

Power Minister Adelabu canvasses Stricter Anti-Vandalism Laws, TCN Funding, and DisCos Accountability to improve Electricity Sector

With current tariff, the Minister of Power, Chief Adebayo Adelabu says Nigeria subsidises electricity consumption to the tune of N200 billion monthly.

Adelabu who was speaking at a two-day retreat organized by the Senate Committee on Power, said despite tariff adjustments that boosted market liquidity by 70 percent, raising sector revenue from ₦1 trillion in 2023 to ₦1.7 trillion in 2024, the distribution segment remains the weakest link.

“In the fourth quarter of 2024, DisCos in the North remitted just ₦124.4 billion (30 percent) of their ₦408.86 billion invoice, with Abuja DisCo accounting for 85 percent of Northern payments. Southern DisCos fared slightly better, remitting ₦254.6 billion (67 percent), though 70 percent of this came from Lagos DisCos alone. These discrepancies are due largely to crumbling infrastructure outside economic hubs, where underinvestment has left networks dilapidated”.

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Adelabu noted that the metering gap, a key driver of revenue loss and consumer distrust, underscores systemic neglect adding that the government has launched a ₦700 billion Presidential Metering Initiative (PMI) and a World Bank-backed program targeting 4.3 million meters by 2025, 75,000 units were deployed in April 2024 while additional 200, 000 is expected in May. “Closing this gap is fundamental to fair billing and financial sustainability,” the Minister acknowledged, “but we are not there yet due to underinvestment and operational inefficiencies.”

According to a statement by the Special Adviser, Strategic Communication and Media Relations to the Minister of Power, Bolaji Tunji, the sector also faces a ₦4 trillion subsidy backlog owed to generation companies, including ₦1.94 trillion for 2024 alone. With monthly subsidy shortfalls now hitting ₦200 billion, the Minister warned that maintaining current tariffs is “unsustainable,” straining public funds needed for infrastructure upgrades.

“To salvage the sector, we will soon embark on restructuring underperforming DisCos and tightening enforcement of performance benchmarks. However, without urgent capital injection into distribution networks, gains in generation—including a historic 6,003MW output in March 2025—and transmission upgrades, such as 61 new transformers deployed in 2024, will fail to translate to reliable household supply”.

Adelabu called on the National Assembly to enact stricter legislation aimed at safeguarding Nigeria’s power infrastructure from acts of vandalism. Emphasizing the need for enhanced legal measures, Adelabu stressed that robust laws are critical to deterring the destruction of vital energy assets and ensuring the stability of the nation’s electricity supply.

Adelabu made the call at the weekend while speaking at a two-day retreat organized by the Senate Committee on Power. According to the Minister, vandalism should not be treated as a civil offence but a criminal issue adding that power theft , nonpayment of bills by consumers, illegal connections are critical factors that need to be tackled.

Adelabu acknowledged that in spite of the challenges, the grid has been stabilized as the country has not witnessed any grid collapse since the beginning of the year.

” The level of stability on our grid today is not by accident but hard work and expenditure. In 2024, TCN installed 61 new transformers by either replacing aged one or building new one. Also in 2025, within the first four months, TCN installed about 13 new transformers and there are high-capacity transformers ranging from 10 megawatts to 300 megawatts. Put together, they run into hundreds of million dollars to install and these are what our people still go out to vandalize.

“Our towers are toppled by saboteurs and vandals, we have illegal connections, and people tampering with meters”. The Minister urged appropriate legislation and public vigilance to protect “national assets that belong to every Nigerian.

“We need more stringent legislation to tackle this problem”, he said.

The Minister also made a case for the Transmission Company of Nigeria (TCN) in appropriation adding that the agency does not have enough money to fund its operations. “ They are short of funds, they operate solely on their Internally Generated Revenue(IGR) which has been nose diving over the years . What they get monthly cannot even pay their salary not to talk of maintaining ageing infrastructure, expanding transmission networks. There should be a way to accommodate TCN in appropriation”, he said.

Adelabu spoke on the persistent crisis threatening to derail progress In the sector which is chronic underinvestment in distribution infrastructure, which continues to cripple service delivery nationwide in spite of landmark reforms in the electricity sector.

The Minister revealed glaring disparities in distribution company (DisCo) performance, with aging networks, rampant electricity theft, and poor investment deepening reliance on unsustainable subsidies and leaving millions in darkness.

“We need to get tough with the DisCos, as they can easily frustrate all the gains we have made. They have disappointed us in performance expectations. Whatever we do in generation does not mean anything to consumers if it is frustrated at the distribution points”.