Electricity: Govt at crossroads over subsidy for rural dwellers

Babatunde Fashola, Minister of Power, Works and Housing

Mr. Babatunde Fashola

Oscarline Onwuemenyi 17 January 2016, Sweetcrude, Abuja – The Federal Government has warned that the possibility of providing some level of financial subsidy for electricity consumers in the rural communities remains uncertain due to lack of resources.

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, made the disclosure in Abuja, maintaining that the decision to continue with subsidising consumption of electricity by rural communities in the country would be a tough choice for the government to make.
Fashola added that the government was already considering recommendation on what would work for it going forward in this regard.
The Federal Government had from inception of the power sector privatisation programme, provided some pool of fund to subsidise electricity consumption by rural citizens of the country.
The measure was aimed at helping the new operators recover cost of distributing electricity to rural communities who would find it difficult to pay the cost-reflective bills given to them by the electricity distribution companies.
According to Fashola, “It was necessary to privatise, no doubt. The previous administration has made some choices – not all those choices have worked, and not all those choices have been completed. Some require re-evaluation.
“One of them is subsidy to the rural areas. Was it the best choice to make under the circumstance? Is there a subsidy in other services in the rural areas? Can the economy carry it along with other subsidies, because we also want subsidy for housing, we have subsidy for fuel, essentially we have subsidy on roads. Can this economy absorb all of that? Will it work better if everybody begins to pay for what it uses?”
“Those are tough choices but they have to be made. Are they going to work that way? So, those are the things we are still looking at and make our own recommendation on what will work and not work,” he noted.
About the Author