By Boluwatife Akinola,
Roseline Okakah
& Godfrey Eze

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Stakeholders are sceptical about the electricity subsidy payment by the Federal Government on behalf of electricity consumers in the country.

They argued that Nigerians are not really benefiting from the electricity subsidy, stressing that the said payment might be going into wrong pockets.

The Federal Government had claimed that it had spent N204. 59 billion on electricity subsidy in the third quarter (Q3) of 2023, and plans to expend an additional N1. 6 trillion in 2024 to enable citizens access power at a low cost, even as government disclosed that the subsidy is no longer sustainable.

Stakeholders have raised concerns over who are the direct beneficiaries of the subsidy in the face of poor electricity supply and blackouts across the country.

They called for transparency and accountability in the management of the subsidy, urging the government to address underlying issues in the electricity sector to truly benefit the masses effectively.

They also emphasised the importance of ensuring equitable access to prepaid meters for all consumers before considering the removal of the subsidy.

According to them, before government can remove subsidy from electricity tariff, there must be adequate power supply and every house must be metred.

Professor Mutalubi Akintunde, from the Engineering Department, Federal University of Technology, Akure (FUTA), expressed scepticism about the subsidy distribution, highlighting that in a functional economy, it should primarily assist the less privileged.

He, however, said the subsidy might not be reaching its intended recipients, saying that the funds could be landing in the pockets of certain individuals instead.

“The subsidy being paid is going into someone’s pocket. If there’s a subsidy being paid, there must be electricity. Nobody can boast of having electricity for six hours a day. It is very sad,” he said.

Furthermore, he stressed the need for equitable distribution of prepaid meters to all consumers before considering the removal of the subsidy.

His words: “removing the subsidy is the best. But before the removal, something must be done. And that means making prepaid meters available to everybody. Whoever is connected to electricity should be metered. If they are metered, people will be more comfortable. Because a lot of people are paying for what they did not consume, the government should see to that. If they do not do that, then removing subsidy is putting unnecessary hardship on the masses.”

Also, a professor from the Department of Electrical and Electronics Engineering, FUTA, Prof. Melodi Adegoke, said, “when the system works and the capacity is enough, it will manage correctly and it won’t need to be subsidized because in this country we have enough gas and we have substantial hydro sources to increase our power generation and also to expand the capacity of transmission and distribution.”

He underscored the importance of effective management within the power supply system, suggesting that long-term solutions should focus on improving infrastructure and operational efficiency rather than relying on subsidies.

On his part, the Head of Department, Electrical and Electronics Engineering, FUTA, Dr. Adu Micheal, explained that electricity subsidy entails financial support aimed at reducing the cost of generating electricity.

Micheal highlighted the potential benefits for consumers, emphasising that the subsidy could alleviate financial burdens associated with electricity expenses.

“The consumers are supposed to be beneficiaries in the sense that if government is paying, it will lessen the burden. When the subsidy is there it will be reduced compared to when the government is not supporting it at all. So, the consumers of electricity are the ones benefitting from it,” he stressed.

Mr. Onyema Odo, General Manager of the Enugu State Rural Electrification Board, noted that while the government stands to benefit financially from ending subsidies, the masses will bear the brunt of higher electricity bills.

“Currently, the government allocates significant funds annually to subsidize electricity by providing electricity at reduced prices, however, without subsidy consumers will face higher bills without corresponding benefits.

“The justification provided for the subsidy removal is to prevent inflation from adversely affecting consumers. Subsidy helps mitigate the impact of inflation on electricity costs, without subsidy, electricity tariffs could surge from N120 per unit to N400 per unit, reflecting the inflationary pressures on items, services, and materials,” Odo stressed.