The Federal Government has said it will gradually phase out electricity subsidies beginning from 2027 as part of efforts to restore the financial viability of Nigeria’s power sector and reduce its growing debt burden.
Minister of Power, Joseph Tegbe, disclosed this on Friday during a media briefing, assuring Nigerians that there are no immediate plans to increase electricity tariffs.
According to him, the reforms are designed to create a commercially sustainable electricity market while ensuring that consumers, particularly vulnerable households, continue to receive the necessary support.
“The phase-out of electricity subsidies will begin from 2027. However, there are no immediate plans to increase electricity tariffs. Our goal is to build a commercially viable power sector while protecting vulnerable consumers,” he said.
The minister said government remains committed to resolving the sector’s debt challenges, improving metering, reducing technical and commercial losses, strengthening payment discipline, and implementing reforms that will attract private investment.
He stressed that the subsidy phase-out would be implemented gradually to shield low-income consumers from its impact.
“The Power Consumer Assistance Fund will play a critical role in cushioning the impact on vulnerable consumers as we implement these reforms,” the minister stated.
He said further details on the implementation timeline and consumer protection measures would be unveiled as the reform process progresses.
Nigeria’s electricity subsidy has remained a major fiscal burden.
The Nigerian Electricity Regulatory Commission (NERC) said the subsidy obligation stood at about N358 billion in the first quarter of 2026, despite recent reductions.
The sector is also weighed down by trillions of naira in outstanding debts owed to power generation companies, prompting the Federal Government to adopt debt-reduction measures, including the issuance of bonds.