The FG’s ₦633bn electricity subsidy in Q1 2024 raises eyebrows. Delve into the implications and potential effects on the national budget.
Findings indicate that the initial quarter of 2024 witnessed a disbursement of more than ₦633.30bn by the Federal Government towards electricity subsidy.
The Nigerian Electricity Regulatory Commission’s quarterly report stated that the amount indicated a surge of 150.5% from ₦252.76 billion in Q4, 2023.
The total amount paid in the first three months of the year exceeds the ₦628.61bn paid between January and December 2023.
The ₦633.30bn was disbursed as follows: subsidy accounted for ₦36.02bn in Q1, ₦135.23bn in Q2, ₦204.6bn in Q3 and a whopping sum of₦252.76 bn was expended on it during the fourth quarter of 2023 seasonally adjusted period .
The rise was attributed by the electricity market regulator to both the government’s efforts at currency exchange rate harmonization and failure to enforce cost-reflective tariffs throughout all power distribution firms.
Notably, as cost-reflective tariffs were not implemented by all DisCos, the Government was responsible for subsidizing ₦633.30 billion in 2024/Q1 which translates to an average monthly amount of ₦211.10 billion.
According to the report, there was a deficit in revenue collection as the DisCos only received ₦291.62bn out of the total billable amount of ₦368.65bn during that period.
Moreover, the cumulative amount of energy acquired by DisCos amounted to 7,171.93GWh with end-use customers receiving a billing of 5,769.52GWh; this indicates an overall efficiency rate for billing at 80.45 per cent.
In the period, ₦57.88bn was collected as revenue by Ikeja DisCo which ranked highest; Eko DisCo came in second with a total of ₦48.74bn while Yola DisCo had the lowest revenue collection at just ₦5.46bn.
Furthermore, among the total revenue amassed during that timeframe, Abuja DisCo raked in ₦48.60bn; Ibadan DisCo garnered ₦30.35bn; Benin DisCo accumulated ₦22.46bn; Enugu Disco secured⃰₦21.24 billion and Port Harcourt Disc Cove collected .39 bn rupees.” *Note: “secured” seems to fit better as a synonym for obtain/achieve rather than accumulate which was already used before
Additional entries are as follows: Kano DisCo has accumulated ₦13.62bn; Jos DisCo gathered ₦13.29bn, and Kaduna DisCo amassed ₦9.60bn in revenue collection.
