The federal government has announced that it will begin a gradual withdrawal of electricity subsidies from 2027 as part of a broader strategy to restore financial stability to Nigeria’s power sector and reduce the industry’s growing debt burden.
Minister of Power, Joseph Tegbe, made the announcement during a media briefing on Friday, stressing that the planned reform would not lead to an immediate increase in electricity tariffs.
According to the minister, the government is focused on creating a commercially sustainable electricity market while ensuring that low-income and vulnerable consumers are protected throughout the transition.
“The phase-out of electricity subsidies will begin from 2027. However, there are no immediate plans to increase electricity tariffs. Our goal is to build a commercially viable power sector while protecting vulnerable consumers,” Tegbe said.
He explained that the reform agenda is designed to address the sector’s longstanding financial challenges through a combination of improved metering, reduced technical and commercial losses, stronger payment discipline, and measures to attract greater private sector investment.
Tegbe said the subsidy removal would be implemented in phases to lessen its impact on households, particularly those with lower incomes.
He noted that the Power Consumer Assistance Fund would serve as a key intervention to cushion vulnerable electricity users as the government rolls out the reforms.
“The Power Consumer Assistance Fund will play a critical role in cushioning the impact on vulnerable consumers as we implement these reforms,” he added.
The minister said more information on the implementation schedule and consumer protection measures would be released as the reform programme advances.
Nigeria’s electricity subsidy has remained a major fiscal challenge, placing sustained pressure on government finances.
Although subsidy costs have declined in recent months, the Nigerian Electricity Regulatory Commission (NERC) reported that the federal government still incurred about N358 billion in electricity subsidy obligations during the first quarter of 2026.
The power sector is also weighed down by trillions of naira in unpaid obligations to electricity generation companies, a situation that has prompted the federal government to explore debt-reduction strategies, including the issuance of bonds, as part of wider efforts to improve the sector’s financial sustainability.
