Babalola Addresses Nigeria's Electricity Tariffs and Inefficiencies

Lanre Babalola, the former Minister of Power and Special Adviser to the President on Power, addressed the issue of electricity tariffs during the third edition of the Abuja Policy Lab, organized by the German Embassy in Nigeria. He warned against placing the burden of inefficiencies in Nigeria's power sector on consumers, arguing that operational losses must be reduced to lower tariffs without sacrificing reliable supply.

Babalola stated that high tariffs should not be automatically deemed cost-reflective, as they may include costs from inefficiencies. He highlighted that the sector experiences aggregate technical, commercial, and collection losses of about 40 percent, which contribute to the high electricity prices.

Babalola noted that the current price of approximately N200 per kilowatt-hour, equivalent to about 15 US cents, is already high by international standards. He stressed that while Nigerians need reliable power, it does not necessarily mean that electricity must be expensive.