Electricity tariff must rise —Osinbajo

Vice President Yemi Osinbajo has hinted that electricity tariff in the country must be hiked as the ultimate solution to the erratic power supply in the country.

But he assured that government will not immediately increase it as it was concerned with cleaning up the electricity value chain at the moment.

He spoke at the 6th Presidential Business Quarterly Forum for Private Sector at the Presidential Villa, Abuja on Monday.

He said: “Listening to questions concerning lower tariffs, we must pay higher tariffs, these sorts of things are inevitable. What we are trying to do is not increase tariffs for now, but how we can ensure we clean up the entire value chain. I’m sure you are aware of the Payment Assurance Guarantee which we put in place for over N700billion to ensure gas is paid for and for liquidity in the whole value chain.

“Today, we will be meeting with the World Bank on a scheme they have been working with us on to fund the entire value chain, and ensure we transit smoothly from where we are, to a much more market-determined policy for electricity.

“This will involve a fair amount of subsidy and help the Federal Government and World Bank are working together on that.

“There is no way of sustaining the current subsidies long term, but we want to ensure the process is smooth.”

Osinbajo also noted that the nation was at a special moment in its journey to food security, saying: “We are in a special moment because the Federal Government has shown commitment towards agriculture and entire value chain. We have seen the enthusiasm of all the players, including the small farmers all across the country.

“Getting feedback concerning issues that have been raised, there is cheaper credit, and the President directed that we set up a small committee to look at the issue of intervention funds in agriculture. 

“It is clear, that we are not able to bring down interest rates overnight, the way out is by some kind of intervention agreement.”

On intervention funds for agriculture, he also government’s to ensure that the funds go to the right people.

“We will ensure that the funds go to the right people and also monitor the use of the funds. We are also refining the Anchor Borrowers’ Programme, and other intervention schemes that we have,” he said.

On the Apapa gridlock, he spoke of continuing measures to deal with it adding: “We have met with all of the important stakeholders, asides from those who do their business there like Flourmills, Dangote, and BUA. We have also met with the Navy, Police, NPA, Lagos State Government, all federal agencies working in the ports and port concessionaires.

“At our last meeting, we worked on a number of initiatives and agreed on a number of things that have to be done. I went personally to see for myself what was going on in the port area.

“There is a major problem there, but everyone has agreed on what to do and there is a plan which we are executing. Nothing would happen overnight, but we have a good plan that will make it work.

“We have taken a number of decisions; empty containers are to be relocated to holding bays, shipping companies would no longer be allowed to operate holding bays within the port, tank farms would not be permitted within the Apapa area and process licensing access to trailer parks by NPA to commence. A task force has been set up to manage traffic within the Apapa and Tin Can Island environs.”