According to the World Bank, the Nigerian electricity market recorded a deficit of $1.4 billion in 2015 and 2016. This deficit was reflective of tarrifs that came at a time when the country’s electricity regulator, the Nigerian Electricity Regulatory Commission (NERC) failed to allow the market to charge cost.
The report also stated that on the average, the country’s electricity market recorded $1 billion annually in financial deficit for operating with tariffs that are not reflective of market realities. The report also noted that the government has committed to provide financial subsidy to the electricity market from 2017 to 2021, to bridge shortfalls in its revenue for that period.
It was labelled the Environment and Social Systems Assessment (ESSA) report and tied to the World Bank Program-For-Results Financing (PfRF) of the PSRP.
The report read, “The transition from a publicly-owned to largely privately-owned power market, which began in 2013, has put the sector under severe stress. High losses, low collections and lack of cost recovery tariffs have resulted in an annual financial deficit to the sector of approximately US$1 billion.”
Source: All africa