The Federal Government of Nigeria has signaled plans for a fresh increase in electricity tariffs as it moves to eliminate broad-based subsidies that it says are no longer economically sustainable.
Minister of Power, Adebayo Adelabu, disclosed this during a recent meeting with the leadership of Nigeria’s power generation companies (GenCos) in Abuja. Adelabu emphasized that while the government remains committed to supporting vulnerable citizens, it can no longer afford to subsidize electricity costs across the board.
“Citizens must now pay the appropriate price for the energy they consume,” Adelabu stated, according to the News Agency of Nigeria (NAN).
“The Federal Government will continue to provide targeted subsidies for economically disadvantaged Nigerians, but we must realize that our economy cannot sustain blanket subsidies indefinitely.”
However, the Minister did not clarify which demographics would qualify as “economically disadvantaged.”
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In a follow-up statement by Bolaji Tunji, Special Adviser on Strategic Communications and Media Relations to the Minister, it was revealed that President Bola Ahmed Tinubu will meet soon with GenCos to address the N4 trillion debt owed to them.
“We recognize the urgency of this matter. The government is committed to resolving this debt to stabilize the sector and prevent further crisis,” Adelabu added.
This move follows earlier signals in February 2024 when the Tinubu-led administration confirmed its intent to gradually increase electricity tariffs. Olu Verheijen, Special Adviser to the President on Energy, had revealed at a World Bank-backed energy conference in Tanzania that new pricing models were under development.
According to Verheijen, tariff increases are crucial to improving system reliability, enabling proper maintenance, and attracting private sector investment.
“One of the key challenges we’re addressing is transitioning to a cost-reflective yet efficient electricity tariff,” she said.
“This will generate the revenue needed to attract private capital while safeguarding the poor and vulnerable.”
Verheijen also underscored Nigeria’s broader economic ambition—to become a $1 trillion economy within five years and attain upper-middle-income status over the next 25 years.
However, the proposed tariff adjustments have not gone unchallenged. In May 2024, organized labour groups, including the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC), staged nationwide protests following tariff hikes for over two million Band A customers.
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Protesters marched to the offices of the Nigerian Electricity Regulatory Commission (NERC), the Transmission Company of Nigeria (TCN), and Abuja Electricity Distribution Company (AEDC), carrying placards with messages such as:
- “Let the poor breathe. Give us affordable and constant power.”
- “N228 per kilowatt is killing—reverse it now.”
- “We are not a generator republic.”
The rising public frustration is further fueled by declining power supply. A recent review by SaharaReporters, citing NERC data, revealed that electricity generation dropped in the fourth quarter (Q4) of 2024.
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According to the report, generation stood at 9,289 GWh/h in Q4, down from 9,450.76 GWh/h in the previous quarter. Average hourly generation also declined to 4,207.41 MWh/h compared to 4,280.24 MWh/h in Q3. Distribution companies received only 3,360.77 GWh/h, a drop from 3,445.13 GWh/h in Q3.
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As Nigeria grapples with mounting sector debts, inconsistent supply, and the challenge of attracting investment, citizens await clarity on how the proposed policies will balance economic realities with public welfare.
