FG to phase out power sector subsidy from 2027
Minister of Power, Joseph Tegbe
Abdullateef Fowewe
The Federal Government has announced plans to gradually end electricity subsidy payments in the power sector starting from 2027, as part of efforts to clear legacy debt and establish sustainable structures for the industry.
The Minister of Power, Joseph Tegbe, disclosed the plan during a media interactive session on Friday while addressing the issue of power sector debt.
He said the subsidy would be removed in phases, but assured Nigerians that they would not be deprived of any benefits in the process.
“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’ll make sure Nigerian consumers continue to have power and improve power services,” Tegbe said.
The Minister also reiterated that there is no plan to increase electricity tariffs in the immediate term, pushing back against fears that consumers would soon face higher bills.
The plan aligns with the International Monetary Fund (IMF) recommendation for Nigeria to phase out electricity subsidies, which the global lender has described as costly and poorly targeted.
In its 2026 Article IV Consultation, the IMF urged Nigeria to deepen electricity reforms to reduce ongoing losses from average tariffs being below cost recovery, describing the gap as an implicit subsidy that constitutes a contingent liability.
The federal government had previously bemoaned the heavy subsidy burden in the power sector, which was pegged at ₦3 trillion as at February 2024.
According to the Q1 2026 report of the Nigerian Electricity Regulatory Commission (NERC), the federal government’s subsidy accounts for 51.95 per cent of the total electricity bill.
