20 October 2015, Sweetcrude, Abuja – The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has weighed in on the issue of electricity tariffs, saying that Nigerians must be prepared to pay more for electricity in order to enjoy continuous improvement in supply.
Emefiele, who stated this in a recent interview, noted that, “What we are saying, is, even if you have to pay a little more so that you can throw away your generator, pay a little more so that you can have more electricity, and I think it is worth it.
“These are some of the policies that the Nigerian Electricity Regulatory Commission (NERC) is putting in place to support what is called the ‘Cost Reflective Tariff.’ But I can assure everybody that whatever that cost reflective tariff turns out to be, it will still be substantially lower than the N80/kilowatt hour spent today on our generators.”
Emefiele went on to highlight that there have been improvements in generation, although he agreed that wheeling capacity was limited.
He further explained that the funds were provided to distribution and generating companies, as well as gas firms, but not all of those funds have been disbursed, because of the issues that we are trying to resolve with the Nigerian Electricity Regulatory Commission, as well as the Nigerian Electricity Bulk Commission.
“Once those issues are resolved, more of those funds will be disbursed and then we can start to talk about the impact.
He also reiterated that discussions around investment into the transmission grid were ongoing and that the CBN would continue to engage with this topic.
“Government, realising that the transmission capacity may be hindered, is already taking steps on how to invest in transmission, so as to improve capacity in that area,” he noted.
The CBN Governor pointed out that the bank’s intervention to distribution and generation companies in the country has galvanised the power sector
According to him, “We have seen some improvement in power generation and it is also true that the wheeling capacity in the transmission grid, is limited.
“I am also aware that we’ve been in discussion with government about efforts being made to encourage investment in the transmission grid, so as to improve the capacity of the transmission to be able to absorb more energy that is generated so that more power can get to our people.”
He added, “We will continue to do so and in the course of time, the actions that are being taken by government to improve the transmission capacity, will be unveiled to all of us and will agree that actions are being taken.
“Yes, those DISCOS are supposed to use the money to buy meters, transformers, and so on so as to improve their capacity, while the GENCOS are required to use the funds to acquire equipment, replace some of their obsolete equipment so that they can also improve on their generation capacity,” he said.
He added that, “We’ve started to see the impact of this positively, by the time the remaining funds are disbursed, it will help to improve the distribution and generation capacities, that is why I told you earlier that government, realising that the transmission capacity may be hindered, is already taking steps on how to invest in transmission, so as to improve capacity in that area.”