The federal government on Friday confirmed it will begin phasing out electricity subsidies from 2027, as part of efforts to restore financial viability to the power sector and curb mounting debt.
Minister of Power Joseph Tegbe, told reporters the removal of the subsidy will be gradual and designed to restore the sector’s fiscal viability without stripping consumers of protections.
He also said there are no immediate plans to raise power tariffs.
NewsQuest reports that the move signals a significant policy shift for Nigeria, which for years has used subsidies to stabilize consumer prices even as state and private power companies struggled with unpaid bills and mounting liabilities.
Our correspondent gathered that phasing out the subsidy will help reduce the sector’s debt burden and encourage more sustainable investment.
Reports indicate that the nation’s power crisis, which is decades-old, still faces structural failures including liquidity collapse across the value chain that has pushed sector debts into the trillions of naira, triggering gas supply cuts to thermal plants, and national grid output down to levels that routinely fall below 4,000MW.
