Nigeria: FG to End Electricity Subsidy From 2027

What the report says

Nigeria’s federal government says it plans to end electricity subsidy payments starting in 2027, a move it says is intended to help reduce large debts in the power sector. The announcement was reported by Vanguard and distributed by AllAfrica, with Power Minister Joseph Tegbe outlining the policy during a media session on Friday in Lagos.

According to the report, the subsidy would be phased out gradually rather than cut off immediately, and the government says consumers should still have access to electricity. Tegbe said the administration has been instructed to deal with legacy debt and build a more sustainable system. He also said there is no immediate plan to raise electricity tariffs.

The proposal fits with broader reform pressure on Nigeria’s power industry, where debt has long been a problem. The article cites government figures placing subsidy costs at about N3 trillion as of February 2024, while generation companies have said they are owed roughly N6.5 trillion. President Bola Tinubu has already approved bond financing to help settle verified power-sector debts, including a N4 trillion programme and two earlier bond tranches.

The report also notes that the planned phase-out aligns with advice from the International Monetary Fund for a gradual removal of electricity subsidies. In general, such reforms are often presented as a way to ease fiscal pressure, though they can be politically sensitive because of their possible impact on households and businesses.