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| Joseph Tegbe |
The federal government has revealed plans to phase out power sector subsidies beginning in 2027.
Minister of Power Joseph Tegbe made the announcement during a media briefing on Friday, while discussing the sector’s mounting debts.
He said the subsidy will be removed gradually to avoid sudden disruption, and assured Nigerians that they would not lose existing benefits during the transition.
Tegbe also emphasized that there are no plans to raise electricity tariffs in the near term.
“We have the mandate of Mr. president to clear the legacy debt and come up with sustainale structures to make sure this doesn’t pile up any more,” Tegbe said.
“I promise you, next year, by God’s grace, we will put a stop to this so-called subsidy in the power sector. Mr. presiden, we will not deprive Nigeria of anything. We’ll make sure Nigerian consumers continue to have power and improve power services.”
The plan, if executed, aligns with the International Monetary Fund (IMF) recommendation for Nigeria to phase out electricity subsidy, TheCable reports.
According to the report, the federal government had bemoaned the subsidy burden pegged at N3 trillion as at February 2024.
The Association of Power Generation Companies (APGC) recently said the federal government owes about N6.5 trillion debt to GenCos.
Tegbe’s latest announcement also comes amid steps already taken by the government to clear power sector debt, following a presidential approval for the issuance of a N4 trillion bond.
In January, the federal government issued a N501 billion inaugural bond under the presidential power sector debt reduction programme (PPSDRP).
On July 20, it announced the issuance of the second tranche of a bond valued at about N729 billion for the settlement of verified legacy debts owed to GenCos.
Earlier in February, President Bola Tinubu directed all ministries, departments and agencies (MDAs) to rely on existing electricity sector laws to clearly define how power subsidy costs are shared among the federal, state, and local governments in the 2026 budget.
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