The Federal Government will phase out electricity subsidy payments from 2027 in its efforts to address mounting debts in the power sector.
Minister of Power Joseph Tegbe disclosed the plan during a media interactive session on Friday, saying the subsidy would be removed gradually and consumers would not lose access to electricity services.
According to the Minister of Power “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.
“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, we will not deprive Nigeria of anything. We will make sure Nigerian consumers continue to have power and improved power services.”
The minister also assured that there is no immediate plan to increase electricity tariffs.
The announcement aligns with recommendations by the International Monetary Fund for Nigeria to gradually remove electricity subsidies.
The government has previously put the subsidy burden at about N3 trillion as of February 2024. However, the Association of Power Generation Companies said GenCos are owed roughly about N6.5 trillion.
Tegbe’s comments come amid ongoing efforts to clear legacy debts in the sector. President Bola Tinubu recently approved a N4 trillion bond programme for debt settlement.
In January, the government issued a N501 billion inaugural bond under the Presidential Power Sector Debt Reduction Programme. On July 20, it announced a second tranche worth about N729 billion to settle verified debts owed to power generation companies.
Earlier this year, Tinubu also directed ministries, departments and agencies to use existing electricity laws to determine how subsidy costs should be shared among the federal, state and local governments in the 2026 budget.
