The Federal Government of Nigeria is spending $1.5bn annually to fund electricity tariff shortfalls, the World Bank has said.
According to the global financial institution, this amount could further increase if the country fails to take the right action.
The 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.
The World Bank said Nigeria’s power sector was operationally inefficient with unreliable supply exacerbated by high losses and lack of payment discipline.
In the transmission sector, the bank said infrastructure in this arm of the industry remained inadequate and congested, stressing that investments in upgrades and maintenance were required.
In the power distribution arm, the bank observed that the Discos on average currently report 50 per cent Average Technical Commercial and Collection losses.
On the policy and regulatory environment, the bank stated that there had been inconsistent implementation of tariff regulation, enforcement of market contracts, and policy direction.
