(Quick News Africa)- The Association of Nigerian Electricity Distributors (ANED) on Wednesday said that wrong tariff setting since the country’s power sector privatization commenced in 2013 is behind the over N1 trillion operational deficit in the sector.
Sunday Oduntan, who is ANED’s director of research and advocacy, made this known during a press briefing in Abuja on Wednesday.
Sunday Oduntan, who is ANED’s director of research and advocacy, made this known during a press briefing in Abuja on Wednesday.
Oduntan noted that the liquidity shortfall of over N1 trillion was created because of government’s failure to provide a cost reflective tariff they promised immediately after the 18 power assets were privatized in November 2013.
He said the 11 electricity distribution companies (Discos) that make up ANED cannot recover their operational costs at the moment due to the high tariff deficiency.
Oduntan maintained that the rise in the foreign exchange rate from N159 captured in the Multi Year Tariff Order (MYTO) 2015 to over N300 since 2016 worsened the liquidity crisis.
According to him, “If I am buying energy at N68 from the generation companies (Gencos) and I am only allowed to sell at N31, then it means I can’t recover my cost. “
The Nigerian Electricity Regulatory Commission (NERC), the power sector regulator, is the only entity that can review the tariff in accordance with Nigerian legal provisions.
