The Federal Government has announced plans to phase out electricity subsidies, with a target date of 2027. According to officials, the decision is part of broader reforms aimed at addressing the mounting financial liabilities in Nigeria’s power sector.
The government says the current subsidy model is no longer sustainable.Authorities noted that unpaid subsidies have contributed to a ballooning debt profile across the electricity value chain. From generation companies to distribution firms, stakeholders are owed trillions of naira, a situation that continues to cripple service delivery.By 2027, the FG intends to transition to a cost-reflective tariff system where consumers pay the actual cost of power.
The government argues this will attract private investment, improve infrastructure, and reduce reliance on public funds.Officials added that measures will be put in place to protect vulnerable Nigerians during the transition. The focus, they said, will be on improving efficiency, metering, and supply quality to justify the eventual removal of subsidies.
