The Federal Government has announced plans to phase out electricity subsidies from 2027 as part of efforts to address the power sector’s long standing financial challenges.
Minister of Power, Joseph Tegbe, disclosed the plan during a media briefing on Friday, July 31, 2026. He said the current subsidy regime has become fiscally unsustainable and continues to fuel liquidity problems across the electricity value chain.
According to the minister, the government will transition to cost reflective electricity tariffs and implement measures to reduce technical and commercial losses. He explained that these reforms are necessary to improve revenue recovery, strengthen the financial position of electricity companies, and attract greater private sector investment.
Tegbe noted that the subsidy removal forms part of broader reforms aimed at creating a self-sustaining power sector. The initiatives include the Presidential Metering Initiative to accelerate prepaid meter deployment, debt settlement bonds to clear outstanding obligations within the electricity market, and grid modernization projects designed to improve the reliability and efficiency of power supply.
He further added that reducing electricity theft, meter bypass, estimated billing, and infrastructure related losses will remain a key priority alongside tariff reforms aimed at ensuring efficient operations of the sector.
However, the Federal Government believes the combined reforms will improve service delivery, restore investor confidence, and place Nigeria’s electricity industry on a more sustainable path.
Notably, officials have yet to release detailed implementation guidelines, including how the subsidy removal will be phased in and whether targeted support will be provided for vulnerable consumers after the policy takes effect in 2027.
By Musekir Faisat OmolaraÂ
