Federal Government to End Electricity Subsidy From 2027, Says Power Minister

The Federal Government says it will phase out electricity subsidy payments from 2027 as part of efforts to address mounting debt in the power sector.

The Minister of Power, Joseph Tegbe, disclosed the plan on Friday during a media interactive session, saying the subsidy would be removed gradually and that consumers would not lose access to electricity services. “We have the mandate of Mr President to clear the legacy debt and come up with sustainable 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 President, we will not deprive Nigeria of anything. We’ll make sure Nigerian consumers continue to have power and improve power services.”

The minister said there is no immediate plan to increase electricity tariffs, and that the removal would happen in stages while a cost-reflective electricity market is developed and vulnerable consumers are protected.

The government has previously put the subsidy burden at about N3 trillion as of February 2024, while the Association of Power Generation Companies says power generation companies are owed roughly N6.5 trillion. President Bola Tinubu has approved a N4 trillion bond programme to help clear the debt, including a N501 billion bond issued in January and a further N729 billion tranche announced on 20 July.

The planned withdrawal aligns with recommendations by the International Monetary Fund and follows the National Integrated Electricity Policy, approved by the Federal Executive Council in May 2025, which already applies cost-reflective tariffs to Band A customers.

The Nigeria Labour Congress has previously warned that removing electricity subsidies could worsen poverty among Nigerians. The Federal Government says further details, including measures to cushion the impact on households, will be announced as implementation approaches.