Tinubu Government Targets Full Removal of Electricity Subsidies by 2027, Raising Fresh Cost-of-Living Concerns
By The Analyst Online Media
ABUJA – The Federal Government has unveiled plans to completely phase out electricity subsidies by 2027, a policy shift that is expected to reshape Nigeria's power sector but has also heightened concerns over its potential impact on millions of households and businesses already grappling with rising living costs.
The proposed reform forms part of the Tinubu administration's broader agenda to establish a financially sustainable electricity market capable of attracting private investment, improving power generation and distribution, and reducing the fiscal burden associated with subsidising electricity consumption.
Presidential Adviser on Power Infrastructure, Sadiq Wanka, said the government would gradually transition to a fully cost-reflective electricity tariff regime, while introducing targeted support measures for economically vulnerable Nigerians through a proposed Power Consumer Assistance Fund. The initiative, according to the government, is intended to cushion the effects of subsidy removal on low-income consumers.
Officials argue that sustaining universal electricity subsidies has become increasingly unsustainable, limiting the sector's ability to attract the level of investment required to modernise ageing infrastructure, improve electricity supply, and ensure long-term energy security.
Despite these assurances, the announcement has sparked fresh concerns among consumers and business operators who fear that the eventual withdrawal of subsidies could further increase electricity costs and deepen the country's ongoing cost-of-living crisis.
Nigeria has witnessed a series of economic reforms over the past three years, including the removal of petrol subsidies and exchange rate liberalisation, both of which have contributed to higher inflation and increased operational costs for households and businesses.
Energy policy analysts note that while cost-reflective tariffs are widely regarded as essential for the long-term viability of the electricity industry, the success of the reform will depend largely on measurable improvements in power supply, effective regulatory oversight, and credible mechanisms to protect vulnerable consumers.
The Presidency has, however, clarified that there is no immediate nationwide increase in electricity tariffs, stressing that reports suggesting an imminent tariff hike misrepresented the government's position. Officials maintained that any future transition would be gradual and accompanied by social protection measures.
As the government moves toward implementing one of the most significant reforms in Nigeria's electricity sector, attention is expected to focus on whether improved service delivery will accompany higher tariffs, or whether consumers will once again bear increased financial burdens without a corresponding improvement in electricity supply.