The Federal Government has announced plans to phase out electricity subsidies beginning next year, in what is expected to be one of the most significant reforms of Nigeria’s power sector.
The announcement was made on Friday by the Minister of Power, Joseph Olasunkanmi Tegbe, who said the decision forms part of the government’s broader strategy to build a financially sustainable and more efficient electricity market.
According to the minister, the gradual removal of the subsidy is aimed at addressing long-standing funding gaps in the power sector, improving service delivery, and attracting greater private sector investment into electricity generation, transmission and distribution.
He noted that while the reform may present short-term challenges, it is necessary to ensure the long-term viability of the industry and reduce the financial burden of subsidies on the Federal Government.
Mr Tegbe said the government would continue to engage stakeholders and implement measures to cushion the impact of the policy on vulnerable Nigerians as the transition unfolds.
Electricity subsidies have for years placed significant pressure on public finances, with successive administrations struggling to balance affordable tariffs for consumers against the operational needs of power generation and distribution companies.
Further details on the implementation framework, timeline and possible consumer support measures are expected to be released by the Federal Government in the coming months.
