By Olayiwola Mercy
The Federal Government of Nigeria is planning to introduce a targeted electricity subsidy to support low-income households and vulnerable citizens, as announced by Minister of Power Adebayo Adelabu. This initiative aims to cushion the impact of rising electricity tariffs, which were recently increased to reflect the true cost of production and distribution. The subsidy is expected to benefit approximately 15% of the population, with the government allocating around N2.36 trillion (approximately $600 million) annually from 2025 to 2027 to support this initiative.
The funds will be used to bridge the gap between the cost-reflective tariffs and regulated electricity rates, ensuring that low-income households can afford electricity. The government is working to identify beneficiaries and develop a system to deliver the subsidy effectively. Adelabu emphasized that the government is committed to ensuring that electricity remains accessible and affordable for all Nigerians, particularly the most vulnerable.
The subsidy plan is part of the government’s broader efforts to reform the power sector and promote sustainability. The government aims to gradually introduce cost-reflective tariffs, allowing electricity prices to match the true cost of production and distribution. This approach is expected to attract investment, improve efficiency, and increase electricity access across the country.
The government has secured funding from development partners, including the World Bank, NSIA, and JICA, to support the subsidy program. The initiative is expected to be implemented in phases, with the government working to eliminate the metering deficit and enhance the financial sustainability of power distribution companies.
The move is seen as a positive step towards supporting low-income households and promoting economic growth. By targeting the subsidy at those who need it most, the government aims to minimize leakages and ensure that the benefits reach the intended recipients. As the government works to implement the subsidy plan, stakeholders are watching closely to see how it will impact the power sector and the broader economy.
