Following the Federal Executive Council, FEC’s recent approval of N2.1 trillion for labour wage adjustments, security and other challenges facing the nation, President Bola Ahmed Tinubu Tuesday, wrote the House of Representatives seeking the approval of a N2.1 trillion supplementary budget.
This was as the President sent alongside the supplementary budget, the 2024-2026 Medium Term Expenditure Framework & Fiscal Strategy Paper to the House of Representatives.
At the FEC on Monday, it was gathered that the Minister of Budget and Economic Planning, Atiku Bagudu, said the budget would fund urgent issues.
According to him, the issues to be funded by the supplementary budget include N210bn for Wage Award for Civil Servants, N605 billion for National Security and Defence and N300 billion for maintenance of bridges, especially the Eko bridge.
Others include N400 billion for cash transfer to vulnerable households, N200 billion for seed and agricultural inputs and equipment as well as N18 billion for the Independent National Electoral Commission to conduct off-season elections.
In another story, President Tinubu has said Nigeria’s power sector privatisation had failed to meet its objectives.
Tinubu stated this recently at the Nigeria Electricity Supply Industry market participants and stakeholder’s roundtable where he noted that the national grid was serving only about 15 per cent of the country’s electricity demand despite being privatised 10 years ago.
The event was focused on privatisation and calling for the recapitalisation of power distribution companies.
According to the President who was represented by the Special Adviser, Energy and Infrastructure, Office of the Vice President, Sodiq Wanka, said, “10 years on, I believe it is fair to say that the objectives of sector privatisation have, by and large, not been met. Over 90 million Nigerians lack access to electricity.
“The national grid only serves about 15 per cent of the country’s demand. This has left households and factories relying on expensive self-generation, which supplies 40 per cent of the country’s demand.
“What is worse is that the total amount of electricity that can be wheeled through the national grid has remained relatively flat in the last 10 years. The grid capacity has increased from just over 3,000MW to roughly 4,000MW today. Versus a 40,000MW target by 2020 that the Federal Government had set pre-privatisation.”
The president stated that the reasons for the sector’s underperformance in the last decade were well known, including deep commercial, governance and operational issues that had beleaguered the sector.
“As of Q2 2023, for every kWh (kilowatt-hour) of electricity sent to the grid, only 60 per cent is paid for. But as we know, even the tariff paid for that unit of electricity is far from being cost-reflective, especially in light of the recent devaluation of the naira.
“The sector has suffered chronic underinvestment, especially in transmission and distribution. Many of the successor utilities of the PHCN have failed to meet their performance improvement targets due to technical and financial capacity issues.
“We are in a vicious cycle of under-performance and under-investment, and everyone has a different view of which value chain player should be blamed for continued sector malaise.
“But we are where we are! And the real question we should ask ourselves in our engagements in the next three days is, how do we move forward from here?”.
He noted that in the short term, stakeholders in the sector must intensify efforts to address commercial issues and improve the investment attractiveness of the sector and that the sector should have a clear plan to rebase tariffs to recognise the actual costs and loss levels of the entire value chain and allow for adequate investment cost recovery.
“We must be clear on shortfalls and how we will finance them. And there must be a clear path to extinguishing historic sector debts to various value chain stakeholders. A reconciliation exercise in this regard is already underway,” the president stated.
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