The Federal Government says it plans to begin phasing out electricity subsidies from 2027 as part of measures to tackle the growing financial challenges facing Nigeria’s power sector
Minister of Power Joseph Tegbe made the disclosure during a media interactive session on Friday, explaining that the subsidy would be withdrawn gradually without disrupting electricity supply to consumers.
According to Tegbe, President Bola Tinubu has directed the government to resolve the sector’s long-standing debts and establish a sustainable system that will prevent the liabilities from building up again.
He said, “We have the mandate of Mr President to clear the legacy debt and come up with sustainable structures to make sure this doesn’t pile up any more.
“I promise you, next year, by God’s grace, we will put a stop to this so-called subsidy in the power sector. Mr President, we will not deprive Nigeria of anything. We’ll make sure Nigerian consumers continue to have power and improve power services.”
The minister also assured Nigerians that there are currently no plans to increase electricity tariffs.
The move is in line with the International Monetary Fund’s recommendation that Nigeria should gradually eliminate electricity subsidies.
As of February 2024, the Federal Government estimated the electricity subsidy bill at about N3 trillion, while the Association of Power Generation Companies said generating companies are owed around N6.5 trillion.
The announcement comes as the government continues efforts to settle outstanding obligations in the power sector, following President Tinubu’s recent approval of a N4 trillion bond programme to clear legacy debts.
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