The Federal Government has announced that as part of its efforts to address mounting liabilities in Nigeria’s power sector, it has concluded plans to phase out electricity subsidies from 2027.
Minister of Power, Mr Joseph Tegbe, who announced this on Wednesday, September 16, 2026, while inaugurating a 3MW solar hybrid power project at Yakubu Gowon University, Abuja, said the Federal Ministry of Power had been directed by President Bola Ahmed Tinubu to clear all legacy debts in the electricity market and establish a sustainable funding structure that would prevent new liabilities from accumulating.
Tegbe said the government’s objective was to end the subsidy regime and ensure that Nigerians have access to reliable electricity and improved services.
According to Tegbe; “We have the mandate of Mr. President to clear the legacy debt and come up with sustainable structures to make sure this doesn’t pile up any more,” the minister said.
“I promise you, next year, we will put a stop to this so-called subsidy in the power sector. We will not deprive Nigerians of anything. We’ll make sure Nigerian consumers continue to have power and improve power services,” he said.
He explained that the planned phase-out followed growing concerns over the financial burden of electricity subsidies, adding that in the first quarter of 2026 alone, the Federal Government covered ₦358.32bn of electricity generation costs.
Tegbe had also said that the government would phase out the subsidy while ruling out an immediate increase in electricity tariffs, adding that the government is working to address legacy debts across the electricity value chain as part of efforts to improve the sector’s financial sustainability.
The subsidy reform comes amid continuing concerns over household living costs following the removal of petrol subsidy in 2023, just as the World Bank’s October 2025 Nigeria Development Update projected that persistent inflation, particularly food inflation, could push Nigeria’s poverty rate to 62 per cent in 2026, representing about 141 million people.
However, the World bank said Nigeria made progress in stabilising its economy through recent reforms, but noted that the gains had yet to substantially improve living standards.
The bank therefore called for measures to reduce food inflation, improve public spending and strengthen social protection.
