The Federal Government has announced plans to gradually phase out electricity subsidies from 2027 as part of efforts to tackle mounting debts in Nigeria’s power sector.
Minister of Power Joseph Tegbe disclosed the plan during a media interactive session on Friday, assuring Nigerians that the subsidy removal would not disrupt electricity supply or deny consumers access to power.
According to him, the Federal Government has been directed by President Bola Tinubu to clear the sector’s legacy debts and establish a sustainable funding structure.
“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,” Tegbe said.
“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 will not deprive Nigerians of anything. We’ll make sure Nigerian consumers continue to have power and improve power services.”
The minister also clarified that the government has no immediate plans to increase electricity tariffs.
The planned subsidy phase-out aligns with recommendations by the International Monetary Fund, which has repeatedly urged Nigeria to gradually eliminate electricity subsidies to improve the financial sustainability of the power sector.
The Federal Government previously estimated the electricity subsidy bill at about ₦3 trillion as of February 2024, while the Association of Power Generation Companies says electricity generation companies are owed approximately ₦6.5 trillion.
Tegbe’s remarks come amid ongoing efforts to settle outstanding obligations in the sector.
President Tinubu recently approved a ₦4 trillion bond programme to clear legacy debts. In January, the government issued an inaugural ₦501 billion bond under the Presidential Power Sector Debt Reduction Programme, followed by a second tranche of about ₦729 billion announced on July 20 to settle verified debts owed to power generation companies.
Earlier this year, the President also directed ministries, departments and agencies to apply existing electricity laws in determining how subsidy costs should be shared among the federal, state and local governments in the 2026 budget.