In a notable development, the Federal Government announced on Thursday that Nigeria’s power sector’s liquidity has surged from N282 billion in 2015 to an impressive N900 billion, marking substantial financial relief for the industry. The disclosure was made during the Ministerial Retreat on the Integrated National Electricity Policy and Strategic Implementation Policy, facilitated by the Nigerian Electricity Regulatory Commission (NERC).
Liquidity, defined as the ease with which an asset can be converted into cash without affecting its market price, was a focal point in the presentation by Sanusi Garba, the Chairman of NERC. Garba highlighted the implementation of mechanisms to enforce payment discipline within the industry, resulting in a significant improvement in distribution companies’ (disco) revenue.
Garba stated, “Liquidity in the market has moved from N282 billion in 2015 to N900 billion now. We have also created a mechanism for enforcing payment discipline in the industry. This has seen Disco revenue improve greatly. We have reduced the fiscal burden on the government from N528 billion to N155 billion in 2022. Without our actions, the subsidy would have been in the region of N665 billion.”
On the sidelines of the summit, Minister of Power Adebayo Adelabu urged collaboration and commitment from operators and agencies in the sector. He emphasized the government’s determination to achieve its goals and warned of consequences for those who fail to deliver.
Adelabu stated, “I appealed to the people working with me, the agencies and public servants, that they should support us to ensure that we deliver and not disappoint Mr. President. And I say we are using the carrot-and-stick approach. We are using the carrot now by appealing to ourselves. If this does not work, we are going to wield the big stick. Before I’m shown the way out, of course, a lot of people will also leave before me. So this (summit) is just a way of preparing ourselves to achieve the mandate and target of the power ministry.”
