The Chairman of the House of Representatives Committee on Finance, Mr. James Faleke, has stated that the government can no longer subsidize power in Nigeria.
The comment was made during the budget defense of the Ministries of Finance and other financial institutions in Abuja.
Mr. Johnson Akinnawo, the Acting Managing Director of the Nigerian Bulk Electricity Trading (NBET), announced that N705 billion has been allocated for electricity subsidies in 2025.
He has allocated two hundred and seventy-seven million naira for staff welfare in 2024.
This has attracted scrutiny from lawmakers, who have raised concerns regarding the increase from the N450 billion allocated in 2024, particularly considering the escalating electricity tariffs in the nation.
The committee chairman, Mr. James Faleke, inquired of the Managing Director whether the government continued to provide funding for the Discos. He responded affirmatively.
The federal government consistently addresses the disparity between the tariff permitted for the distribution companies and the cost-reflective tariff as determined by the commission, in accordance with their periodic guidance. Mr. Akinnawo stated that the Delta is supported by federal government appropriation, as outlined in the 2025 budget, which indicates that the federal government can fulfill an obligation of up to seven hundred and five billion naira.
Mr. Faleke promptly stated that, in light of the naira’s floating and the consistent rise in electricity tariffs, the subsidy amount has become unnecessary.
The proposed N277 million welfare allocation in NBET’s 2025 budget has been flagged, with the committee indicating that it will be removed from the NBET budget.
Ministry Initiatives
The Minister of State for Finance, Mrs. Doris Uzoka-Anite, provided a report on the activities of the Ministry.
The ministry has been collaborating with other government agencies to stabilize the economy.
The ministry reported generating 14 million in 2024, despite not being a revenue-generating agency.
The Ministry reported complete utilization of its N8.16 billion budget for 2024 and has requested a substantial increase to N25 billion for 2025.
The additional funds are designated to tackle issues including exchange rate differentials, rising overhead costs, and requirements for capital expenditure.
In 2024, the total amount was N2,413,790,305. The total amount overhead is N1,809,809,393. The total budget for 2024 allocated to the Federal Ministry of Finance is N8,106,450,530 Naira. Our performance for 2024 is as follows: a percentage of 100%, overhead at 100%, and capital at 22%.
The total budget for 2025 is as follows: N2,495,300,769 for personnel, N3,565,556,897 for overhead, and N7,450,800,902 for capital. The total amount is N13,511,607,568.
This includes the issue of exchange rate depression. We fulfill our mandates by representing the country and engaging with international organizations.
“Our offices present well externally, but the interior requires significant improvement.” We hope you can enhance our capital allocation and optimize the overhead. We believe that collaborating with the Senate committee on finance will enhance our capital allocation and optimize our overhead. “Five goes to overhead,” she stated.
In the meantime, the Chairman of the Fiscal Responsibility Commission, Mr. Victor Muruako, encouraged the committee to revise their enabling Acts to enhance operational efficiency.
He expressed concerns regarding more than fifty offenses in the Fiscal Responsibility Act that do not have clearly defined penalties.
Mr. Muruako also requested additional funding, highlighting the inadequacy of current allocations for personnel and capital projects.
The commission indicated a capital release of 38.18% for 2024 and requested enhanced funding for 2025.
He stated, “In 2025, we anticipate a total overhead of N255,753,579 alongside capital costs amounting to N515,152,803.” The total cost amounts to N1,415,357,014 billion.
As of December 31, 2024, our total capital releases amount to N246,481,918.79. This represents 38.18% of the total appropriation for the year. The recurrent appropriation was completely released as of December 31, 2024. The Commission has released and expended personnel costs amounting to N255,753,579 through IPPIS, which accounts for 100% of the total personnel appropriation for the year.
“We would like to highlight that our personnel appropriation was fully utilized as of October.” We requested additional funding to ensure our staff can receive their payments for October, November, and December. This resulted in a delay of staff payments for the period, occasionally extending up to three weeks.
“We once again allocated inadequate funding for personnel in 2025.” The Commission received a limited personnel appropriation, which restricts opportunities for promotion and certain allowances. The total proposed for personnel in 2025 is N361,871,239.
Our overhead envelope amounts to N738,291,539. The capital amounts to N596,930,905. Proposing an appropriation for FRC in 2005 amounting to =N=1,697,674.
“Our responsibility involves engaging with government-owned enterprises and revenue agencies, as we hold the belief that every agency contributes to revenue generation, regardless of the percentage.” Through our contributions, we have enhanced our ability to sustain independent revenue from the federal government over the years.
“Our capabilities are enhanced significantly due to your support.” In 2022, a total of =N=1.3 trillion was tracked and facilitated with your support by the Commission, which included =N=181 billion as operating surplus and =N=1.1 trillion as IGR from NDAs. The figure was enhanced in 2023, resulting in a total sum of =N=1.8 trillion generated.
In 2025, the total allocation amounts to 5.58 billion naira, with personnel costs at 3.599 billion naira. The capital budget for 2025 is set at 906,120,895 naira, and the overhead is 1.066 billion naira for the same year.
The committee however resolved to meet with the Nigerian Electricity Regulatory Commission (NERC) and NBET for detailed justification of the N705 billion subsidy under the Power Reform Programme. Further consideration of the proposed budget is currently on hold until that time.
Various agencies, such as the Ministry of Finance Incorporated, MUFI, and the Ministry of Interior, submitted their budget proposals and justified their expenditures for 2024.
Committee members posed several inquiries to the agency heads prior to their discharge.
