By Our Reporter
Federal Government has announced plans to phase out electricity subsidy payments from 2027 as part of efforts to address mounting debts in the power sector.
Minister of Power Joseph Tegbe, disclosed this on Friday during a media chat, saying the subsidy would be removed gradually and consumers would not lose access to electricity services.
“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.
“I promise you, next year, by God’s grace, we will put a stop to this so-called subsidy in the power sector. We will not deprive Nigeria of anything. We’ll make sure Nigerian consumers continue to have power and improve power services,” he said.
The minister also said there was no immediate plan to increase electricity tariffs.
Recalled that the announcement aligned with recommendations by the International Monetary Fund (IMF) for Nigeria to gradually remove electricity subsidies.
The government has previously put the subsidy burden at about N3 trillion as of February 2024, while the Association of Power Generation Companies says GenCos were owed roughly N6.5 trillion.
Tegbe’s comments came amid ongoing efforts to clear legacy debts in the sector as President Bola Ahmed Tinubu recently approved a N4 trillion bond programme for debt settlement.
Recalled also that the government in January this year issued a N501 billion inaugural bond under the Presidential Power Sector Debt Reduction Programme, while on July 20, it announced a second tranche worth about N729 billion to settle verified debts owed to power generation companies.
Earlier this year, Tinubu also directed ministries, departments and agencies to use existing electricity laws to determine how subsidy costs should be shared among the Federal, state and local governments in the 2026 Budget.
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