FG plans N100b power subsidy for low income earners
The Federal Government is to inject N100 billion in the 2012 budget as subsidy to cushion the effect of electricity tariff on low income earners, The Nation has learnt
A source at the Bureau of Public Enterprises (BPE) said as part of its efforts to source for funds for Nigeria’s power projects, it has been able to get the Minister of Finance, Dr. Ngozi Okonjo-Iweala, to dedicate N100 billion in the 2012 budget as subsidy for the impending high electricity tariff.
The official, however, claimed that Okonjo-Iweala agreed to the figure on the condition that the subsidy would be of benefit low income earners who may not be able to afford the planned electricity tariff.
The decision to source for funds other than what investors would bring as proceeds of the privatisation of the power companies, he said, is to assure bidders for the power companies that President Goodluck Jonathan wants the power transactions to be completed on schedule “and has assured all parties of his maximum support.”
He lamented that distribution and transmission components of the power sector of the privatisation are posing serious challenges to the government, a development that has forced the BPE to make advances to them to ensure that funds are sourced to expand the transactions. At present, the BPE, the official said, is sourcing funds from different local and multilateral agencies.
The privatisation of the power sector, he pointed out, will be interactive between the government and potential investors, stressing: “If there are issues regarding transactions, we need close, we will interact with investors to get the exercise right.”
Another thorny point in the power sector privatisation, he said is the lingering labour crisis. He said the BPE “hopes to use the money paid to address labour issues. There is a tacit agreement that the proceeds will be used expeditiously, but that it would be paid first into the nation’s coffers as required by law before it is used to settle labour matters.”
The BPE official also admitted that labour issues were a challenge, because the government “wants investors to have access to sites and does want investors to be barred from sites.” He assured the bidders that “by October 14, 2011, the BPE expects to have resolved labour issues because they are interested in seeing investors run their businesses with minimum discomfort.”