Vice President of Nigeria, Prof. Yemi Osinbajo, has stated that until there is stability in the power sector, electricity tariffs cannot remain at the levels they are currently.
Speaking yesterday afternoon at the Annual General Meeting of the Manufacturers Association of Nigeria, MAN, the Vice President who represented President Muhammadu Buhari as the Special Guest of Honor said truth of the matter regarding electricity tariffs is that “at this point, if we wanted to have a cost effective tariff, the only way is to service that core value chain, the only way is to ensure that we are paying and compensating the value chain -from generation down to distribution- a cost effective tariff.”
In a similar vein, the Vice President also made it clear at the meeting that a review of the CBN restrictions on foreign currency is not imminent.
“I want to make it absolutely clear that the position is not that a review of the CBN restrictions on foreign exchange is imminent. It is a short term measure, not a policy, and as things improve, we will have a discussion about what to do. But certainly not that a review is about to take place.”
He spoke more on the electricity tariffs and his comments are hereby reproduced verbatim: “Power is of course crucial and as the president said in his inaugural address, to which President Mbeki referred, the question of power is one that is absolutely crucial to manufacturing and practically everything else and we shouldn’t be rejoicing at 4000 Megawatts of power. But the problems are historical and several of those problems will need tackling head on, on a day-by-day basis.
“One aspect of the problem that i want to speak about, because this also affects manufacturing, is the whole idea of the tariffs. Of course the president of MAN just said that we have one of the most expensive electricity in the world.
“Now, the truth of the matter is that at this point, if we wanted to have a cost effective tariff, the only way is to service that core value chain, the only way is to ensure that we are paying and compensating the value chain -from generation down to distribution- a cost effective tariff.
You cannot have that cost effective tariff without some pay. At the moment, (when you compare) how much it costs to produce power, and the amount of power that is generated, the losses on account of distribution are significant. In some cases you have up to 40% losses in distribution, and of course it is the DisCos that have to take that burden.