Nigeria’s federal government has said it will begin phasing out subsidy payments in the power sector from 2027, marking a significant shift in how the country manages electricity funding.
Joseph Tegbe, the minister of power, made the announcement on Friday during a media interactive session, where he addressed ongoing concerns about the sector’s mounting debt profile.
Tegbe said the removal would not happen overnight. The government intends to wind down the payments in stages, and he assured Nigerians that the process would not leave ordinary citizens worse off, The Cable reported.
“The subsidy will be gradually removed, but Nigerians will not be deprived of any benefits,” he said.
The minister did not provide a detailed timeline for each phase of the removal, but confirmed that 2027 is the target year for the policy to take effect.
No immediate tariff increases planned
Tegbe also pushed back against fears that Nigerians would soon face higher electricity bills, saying there are no plans in the immediate term to raise tariffs. The clarification came amid wider concerns about the cost of living and the economic burden already facing households across the country, Vanguard reported.
Nigeria’s power sector has long been weighed down by a gap between what distribution companies collect from consumers and what it actually costs to generate and transmit electricity, a shortfall the government has historically covered through subsidies.
The plan to phase these out reflects a broader fiscal effort to reduce the government’s financial exposure in the sector.
In another development, the Rural Electrification Agency (REA) commenced construction of 48 interconnected mini-grid projects in 19 states, a move aimed at expanding electricity access to underserved communities through Nigeria’s updated off-grid power framework.
The projects are being developed under the Nigerian Electricity Regulatory Commission’s (NERC) new interconnected mini-grid (IMG) regulations, which allow significantly larger renewable energy systems than previously permitted.
The president said the proposed framework would operate with adequate checks and balances, adding that traditional rulers would have a role to play in holding the system accountable. He said the federal government remains committed to building a stronger national security architecture.
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