The Federal Government has announced plans to gradually phase out electricity subsidies from 2027 as part of efforts to place Nigeria’s power sector on a sustainable financial footing.
Minister of Power Joseph Tegbe disclosed the plan during a media briefing on Friday, saying the government has received President Bola Tinubu’s approval to end the long-running subsidy regime while ensuring consumers continue to enjoy improved electricity supply.
Tegbe clarified that there are no immediate plans to increase electricity tariffs, stressing that the transition would be carefully managed to protect consumers.
He said the government is also working to clear the sector’s legacy debts and establish structures that will prevent the accumulation of fresh liabilities.
The planned subsidy removal aligns with recommendations by the International Monetary Fund (IMF), which has repeatedly urged Nigeria to eliminate electricity subsidies. The government previously estimated the subsidy burden at about ₦3 trillion, while power generation companies say they are owed approximately ₦6.5 trillion.
To address the debt, the Federal Government has already secured presidential approval for a ₦4 trillion bond programme. It has issued an inaugural ₦501 billion bond and a second tranche worth about ₦729 billion to settle verified debts owed to generation companies.
Earlier this year, President Tinubu also directed ministries, departments and agencies to clearly define how electricity subsidy costs would be shared among the federal, state and local governments in the 2026 budget, in line with existing electricity sector laws.