The Ethiopian government is taking steps to address financial challenges within its electricity sector through a tariff reform, alongside the implementation of a significant fuel subsidy program. State Minister of Finance Eyob Tekalign (PhD) revealed these developments during a recent Q&A program organized by the Prime Minister's office.
During the Q&A session, State Minister Eyob highlighted that Ethiopia's electricity sector is facing financial difficulties, with many institutions struggling to cover their operational expenses. He also pointed out that approximately half of the Ethiopian population lacks reliable access to electricity, underscoring the critical need for reform in the energy sector.
To address these issues, the government is implementing a tariff reform aimed at ensuring the financial sustainability of electricity providers. State Minister Eyob explained that the tariff adjustments were designed to minimize the burden on low-income citizens, noting that households using up to 50 kilowatts will only see an increase of four birr per month. He emphasized that this careful approach seeks to balance the financial viability of energy providers with the need to protect vulnerable populations.
The State Minister further outlined two paths for development, one prioritizing sustainable electricity access and another risking stagnation, urging that "We must choose wisely," as sustainable energy solutions are crucial for the country's growth.
In the same Q&A program, State Minister Eyob announced a significant fuel subsidy program worth 70 billion birr. This initiative aims to alleviate the financial burden on citizens by counteracting rising fuel prices that have affected many Ethiopians amidst recent economic pressures. The subsidy will range from 12 to 24 birr per litre, depending on the fuel type. "We recognize the challenges our people face and are committed to providing relief," stated State Minister Eyob regarding the fuel subsidy. "The subsidy is expected to provide much-needed financial support to households and businesses struggling with increased fuel costs.”
While addressing the nation's economic landscape, State Minister Eyob also touched upon the historical factors contributing to the current energy challenges, mentioning corruption and mismanagement in previous years as having exacerbated the issues within the electricity sector.
According to the minster, the government's current initiatives, both in reforming the electricity tariffs and subsidizing fuel, signal a commitment to tackling these interconnected economic pressures.