The Federal Government has unveiled plans to gradually discontinue electricity subsidies beginning in 2027 as part of a broader strategy to resolve the financial crisis affecting Nigeria’s power sector.
Minister of Power Joseph Tegbe announced the decision during a media briefing on Friday, stating that the government intends to end subsidy payments while ensuring Nigerians continue to enjoy access to electricity.
Tegbe explained that President Bola Tinubu had directed the ministry to clear the sector’s outstanding debts and introduce lasting measures that would prevent similar financial challenges in the future.
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.”
He also clarified that the government is not considering an immediate increase in electricity tariffs.
The planned subsidy removal is consistent with the International Monetary Fund’s advice that Nigeria should gradually phase out electricity subsidies.
Government figures previously showed that electricity subsidies had reached about N3 trillion as of February 2024, while the Association of Power Generation Companies estimates that electricity generation companies are owed approximately N6.5 trillion.
The announcement follows President Tinubu’s approval of a N4 trillion bond programme aimed at clearing legacy debts in the power sector.
