Babalola Addresses Power Sector Inefficiencies Impacting Tariffs

Lanre Babalola, the Special Adviser to the President on Power and former Minister of Power, addressed the issue of high electricity tariffs in Nigeria during the third edition of the Abuja Policy Lab organized by the German Embassy in Nigeria. He warned against passing the costs of inefficiencies in the power sector onto consumers, arguing that reducing operational losses could help lower tariffs while maintaining reliable supply.

Babalola noted that high electricity prices should not be automatically deemed cost-reflective and emphasized the need to examine the costs incurred by operators. He highlighted that approximately 40 percent of aggregate technical, commercial, and collection losses contribute to the high cost of power.

These losses weaken the financial position of power-sector operators and hinder their ability to invest in infrastructure. Babalola cited a tariff of about ₦200 per kilowatt-hour for Band A customers, which he described as high by international standards.