President Tinubu has directed states to co-fund electricity subsidies with the Federal Government, marking a major fiscal shift in power sector financing.
State governments will now share the cost of electricity subsidy with the Federal Government following a directive by President Bola Tinubu. The subsidy will be funded through the Power Assistance Consumers Fund, a targeted support mechanism for vulnerable households. Director-General of the Budget Office, Tanimu Yakubu, said the move aims to end “open-ended fiscal residuals” in power sector financing.
Yakubu said, “If you want a stable power sector, we must pay for the choices we make,” adding that subsidy costs must be “explicit, tracked and funded.” While the Nigerian Governors’ Forum said it is reviewing the decision, experts described the policy as inevitable but warned of legal, fiscal and equity challenges in implementing state-level contributions.