FG Sets Stage to End Electricity Subsidies, Promises Relief for Poor Households as Cost-Reflective Tariffs Loom

The Federal Government has reaffirmed its plan to gradually phase out electricity subsidies and introduce cost-reflective tariffs nationwide, while pledging to shield low-income and vulnerable Nigerians from the financial impact through targeted support programmes.

The commitment was announced by the Special Adviser to the President on Power Infrastructure, Sadiq Wanka, during the Asharami Square 3.0 conference organised by Sahara Group in Lagos on Wednesday. The event, themed “Energising Africa’s Future: Legacy, Impact, and Transformation,” brought together stakeholders to discuss the future of Africa’s energy sector and sustainable electricity development.

Speaking at the event, Wanka described the transition to cost-reflective electricity pricing as a key government policy aimed at creating a more sustainable power industry. He noted that although the reform remains a sensitive issue for consumers and investors, the government has already taken the first step by implementing cost-reflective tariffs for Band A customers.

According to him, the policy will eventually extend to all electricity consumers, but only alongside measures designed to protect economically disadvantaged households. He disclosed that the proposed Power Consumer Assistance Fund will serve as a safety net by providing financial support to vulnerable families as the subsidy removal progresses.

Wanka explained that while a specific implementation date has not been fixed, the government expects the nationwide rollout of cost-reflective tariffs, supported by consumer protection measures, to take place within the next year.

On investment needs, the presidential adviser warned that Nigeria’s electricity sector remains significantly underfunded compared to other developing economies. He revealed that the country currently attracts only about $1 billion in annual investment across power generation, transmission and distribution, far below the level required to modernise the industry.

He estimated that Nigeria would require between $9 billion and $12 billion in yearly investments through 2045 to achieve universal electricity access, strengthen the national grid and support increasing industrial and economic activities.

Wanka further projected that the country’s electricity sector would need an estimated $121 billion in total investment over the next two decades to bridge existing infrastructure gaps and deliver reliable power to Nigerians.

Meanwhile, former Minister of Power, Barth Nnaji, has alleged that vested interests benefiting from Nigeria’s unreliable electricity supply are frustrating efforts to improve the sector. He claimed that fuel marketers and generator dealers continue to profit from poor electricity services and have become major obstacles to achieving stable power nationwide.

Nnaji made the remarks during The South East Political Roundtable programme on Flo FM in Umuahia, Abia State, where he also expressed concern over the recurring collapse of the national grid and its impact on businesses and households across the country.