The Federal Government has announced plans to gradually phase out subsidy payments in Nigeria’s power sector beginning from 2027, with Minister of Power Joseph Tegbe assuring that no immediate tariff increases are planned and that Nigerians will not be deprived of current benefits during the transition.
Nigeria’s power sector subsidy is on borrowed time — and the federal government has now put a date on its departure.
Minister of Power Joseph Tegbe announced on Friday that the federal government intends to phase out subsidy payments in the power sector from 2027, describing the removal as gradual and insisting that ordinary Nigerians would not lose out on existing benefits during the transition process.
Tegbe made the disclosure during a media interactive session focused on the power sector’s mounting debt crisis, as reported by TheCable. While the minister confirmed the subsidy phase-out plan, he moved to temper concerns about its immediate impact on electricity consumers. “There is no plan to increase tariffs in the immediate term,” he stated.
The announcement adds the power sector to a growing list of subsidy reform initiatives under the Tinubu administration, which famously ended the petrol subsidy regime in May 2023 — a move that triggered immediate and widespread economic pain through fuel price increases that cascaded into higher transport fares and food prices across the country.
The power sector subsidy has long been a fiscal burden on the federal government, keeping electricity tariffs artificially below cost-reflective levels while leaving distribution companies under-funded and unable to invest adequately in infrastructure. The sector’s debt crisis — the backdrop against which Tegbe made Friday’s announcement — has compounded years of chronic underperformance in electricity generation, transmission and distribution.
The minister did not provide a detailed roadmap for how the phase-out would be implemented, what mechanisms would protect vulnerable consumers, or how the government intended to ensure that the removal of subsidies translated into improved service delivery rather than simply higher costs for Nigerians already grappling with severe economic hardship.
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