Nigeria to Phase Out Electricity Subsidies by 2027

The Government of Nigeria announced plans to phase out electricity subsidy payments starting in 2027. Minister of Power Joseph Tegbe disclosed the initiative during a media interactive session on Friday, explaining that the government can no longer sustain the financial burden, which reached an estimated N3 trillion as of February 2024.

The move aligns with recommendations from the International Monetary Fund and aims to establish a cost-reflective electricity market. Tegbe stated there are no immediate plans to increase tariffs and promised that targeted interventions would protect vulnerable consumers.

This policy follows broader efforts to stabilize the industry and resolve massive sector debts. These efforts include the issuance of bonds totaling over N1.2 trillion to settle legacy debts owed to power generation companies. The Association of Power Generation Companies previously reported that the federal government owes approximately N6.5 trillion to firms in the sector.