Federal Government's Bold Move: Power Sector Subsidy to Be Phased Out by 2027

The Federal Government of Nigeria has unveiled its strategy to phase out subsidy payments within the nation's power sector, with a definitive target set for 2027. This pivotal decision is part of a broader initiative aimed at establishing a more resilient and sustainable operational framework for the electricity industry. According to Minister Tegbe, the government intends to gradually discontinue the subsidy while concurrently addressing and settling outstanding legacy debts that have accumulated within the sector. He emphasized the presidential mandate to resolve these historical financial burdens and implement enduring structures to prevent future debt accumulation.

Minister Tegbe provided strong assurances to Nigerian electricity consumers, stating that the planned cessation of subsidies would not result in the forfeiture of existing benefits. He reaffirmed the government's unwavering commitment to continuously enhance the quality and reliability of power supply across the country. Tegbe explicitly promised that by next year, the subsidy in the power sector would be brought to an end, without depriving Nigerians of essential services, and with a focus on improving power provision. Furthermore, he clarified that there are no immediate intentions to increase electricity tariffs as the government progresses with its plan to eliminate the subsidy.

The minister recently highlighted significant progress in electricity provision, noting that various regions previously plagued by extended power outages are now enjoying up to 18 hours of daily electricity supply. This disclosure was made during the commissioning of a 3-megawatt solar hybrid power project at Yakubu Gowon University in Abuja. Tegbe shared anecdotes of consumer reactions to these improvements, including instances where individuals jokingly requested him to “slow down,” as their freezers were now functioning continuously, causing everything to freeze. He humorously retorted that this is precisely the intended function of a freezer: to freeze food that requires it.

Recalling his screening by the Senate, Minister Tegbe reminded the public of his earlier pledge that Nigerians would witness tangible improvements in electricity supply within a timeframe of three to six months. The current enhancements, which include areas experiencing prolonged outages now receiving substantial daily power, demonstrate the government's efforts to fulfill these commitments and stabilize the nation's power infrastructure.