SUBSIDY ON ELECTRICITY RETURNS

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In the second quarter of 2023, the Nigerian federal government allocated a substantial N135.23 billion to subsidised electricity consumption. This figure represents a significant increase from the N36 billion allocated in the previous quarter. The surge in subsidy expenditure is primarily attributed to the absence of cost-reflective tariffs, which necessitated the government’s intervention to bridge the gap through subsidies. This policy is a response to the prevailing economic conditions in the power sector.

Furthermore, the government’s commitment to subsidise electricity consumption saw a staggering 275 percent rise in Q2 2023 compared to Q1. This substantial increase highlights the scale of financial support required to sustain electricity accessibility for consumers. It underscores the government’s efforts to ensure that electricity remains affordable and accessible to the Nigerian population.

Notably, the report also highlights positive developments in the performance of distribution companies (DisCos). Seven DisCos exhibited over 100 percent remittance performance, indicating an improvement in their revenue contributions. These companies include Ikeja, Ibadan, Benin, Eko, Enugu, Jos, and Yola. This uptick in remittances can be attributed to the government’s policy of harmonising exchange rates, which indirectly influenced the financial performance of these DisCos.

Additionally, during the second quarter of 2023, Distribution Companies made significant strides in deploying meters. A total of 178,864 meters were installed, signifying a 2.04 percent increase compared to the previous quarter. This increase in meter installations is a positive step toward improving the accuracy of billing and ensuring that customers are charged based on actual consumption.

In terms of revenue generation, the DisCos collectively generated N267.86 billion by the end of Q2 2023, out of the N354.61 billion billed to customers. This demonstrates an upward trajectory in revenue collection compared to the previous quarter. It reflects the combined efforts of DisCos to improve remittances and implement effective collection campaigns, especially for post-paid customers.

 

 

 

 

 

 

 

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