President Tinubu
Olayiwola Mercy
President Bola Tinubu has directed the implementation of a clear cost-sharing framework for electricity subsidies, aiming to share the burden between the Federal Government and state governments. This move is expected to promote transparency and accountability in the power sector.
The directive is part of efforts to reform the electricity sector, which has been plagued by inefficiencies and inadequate funding. The Federal Government has been shouldering the bulk of the subsidy costs, but this approach is no longer sustainable. By involving state governments, the burden will be shared, and states will have more stake in ensuring efficient power supply.
The cost-sharing framework will be implemented through the Power Assistance Consumers Fund (PCAF), a government-backed financial pool designed to subsidize electricity bills for low-income and vulnerable households. This move is expected to improve energy access and stabilize the electricity sector.
According to the Budget Office of the Federation, the President has instructed that subsidy costs be made explicit, tracked, and fairly shared across tiers of government. This will prevent hidden liabilities and recurring crises in the power market.
The move is also expected to encourage states to implement efficient and cost-reflective tariffs, which will help reduce the subsidy burden. Some states have already established their own electricity regulatory commissions, taking advantage of the Electricity Act 2023, which empowers states to regulate their electricity markets.
The Federal Government has also launched a $122 billion initiative to revitalize Nigeria’s power sector, aiming to attract investments and improve electricity supply. The National Integrated Electricity Policy, approved by President Tinubu, provides a comprehensive framework for sustainable power generation, transmission, and distribution.
The policy shift is expected to promote transparency and accountability in the power sector, reducing the burden on the Federal Government and encouraging states to take ownership of their electricity markets.
