The Minister of Power, Adebayo Adelabu, has urged Nigerians to embrace cost-reflective tariffs, saying the economy cannot sustain the payment of subsidies indefinitely.
The minister in a statement by his Special Adviser, Strategic Communications and Media Relations, Bolaji Tunji, disclosed this while meeting with the Chairman of Generating Companies of Nigeria (GenCos), Dr. Joy Ogaji in Abuja on Sunday.
The meeting comes amid growing concern over the liquidity crisis in the power sector, which has left GenCos struggling to maintain operations.
Speaking at the meeting, Adelabu said the federal government would prioritise the immediate payment of a “substantial” portion of the debt in cash, while the remaining liabilities would be addressed using financial instruments like promissory notes.
“We need to pay a substantial amount of the debt in cash. At the minimum, let us pay a substantial amount, then ask for a debt instrument in promissory notes to pay the rest.
“Citizens must pay the appropriate price for the energy consumed. The federal government will continue to provide targeted subsidies for economically disadvantaged Nigerians. We have to understand that our economy cannot sustain subsidies indefinitely,” the minister said.
Adelabu said the resolution strategy will be tabled before President Bola Tinubu in a proposed meeting with GenCos’ leadership, adding that the outstanding balance could be cleared within six months.
“We recognise the urgency of this matter. The federal government is committed to resolving this debt to stabilise the sector and prevent further crisis,” he added
Adelabu acknowledged the government’s role in the sector’s struggles, pledging to not only clear the debt but also implement reforms to ease operational bottlenecks.
Meanwhile, Ogaji detailed systemic challenges undermining GenCos, including chronic payment defaults, erratic gas supply, and foreign exchange volatility. She noted that the naira’s plunge from ₦157/$1 in 2013 to ₦1,600/$1 had devastated maintenance budgets and loan repayments. “GenCos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” she said.
The minister outlined plans to transition the sector toward sustainability, including regulatory reviews to reduce levies and enhance market stability.
He also urged GenCos to collaborate on advocacy efforts to educate Nigerians on efficient
electricity use and tariff realities.
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