The Federal Government of Nigeria incurs a $1.5bn (N568.5bn at N379/$ exchange rate) expense annually funding electricity tariff shortfalls, the World Bank has said.
World Bank further warned that this amount could further increase if the country fails to take the right action.
The bank’s disclosure was contained in its enlarged report on Nigeria Power Sector Recovery Programme obtained by our correspondent in Abuja on Sunday.
“FGN (Federal Government of Nigeria) is spending $1.5bn per year to fund tariff shortfalls and this could continue to rise if action isn’t taken,” the bank stated in the document.
The World Bank said Nigeria’s power sector was operationally inefficient with unreliable supply exacerbated by high losses and lack of payment discipline.
The document noted that in the policy and regulatory environment, there had been inconsistent implementation of tariff regulation, enforcement of market contracts, and policy direction.
On electricity access, the bank stated that Nigeria now had the largest number of un-electrified people globally and the trend was worsening.
It noted that of the electrified, the supply was very unreliable with widespread blackouts.
It stated that a holistic approach was necessary to address the power sector situation in a sustainable manner.
