Minister of Power says FG cannot keep paying electricity subsidy and still provide light for every Nigerian

Nigeria’s Minister of Power, Joseph Tegbe, has said the Federal Government cannot continue paying electricity tariff shortfalls indefinitely and still expect to provide power to every Nigerian, renewing questions about the future of electricity subsidies and the government’s promise to improve supply.

Tegbe made the remarks at an energy conference organised by the Harvard Business School Association of Nigeria in Lagos on Friday, October 9, where he discussed the financial problems affecting the electricity sector and the need to change how the market operates.

“We can’t keep covering tariff shortfalls and think we’ll give power to every Nigerian,” the minister said.

He argued that the government needed to move away from a market structure in which public funds continually cover the gap between electricity costs and the revenue collected from customers. He proposed greater use of bilateral electricity agreements, under which power producers supply electricity to distribution companies or customers under agreed commercial terms.

The comments have added a new dimension to the debate over electricity subsidies, particularly because Tegbe had previously spoken about ending the arrangement before appearing to distance himself from that position.

On July 31, the minister said the Federal Government planned to phase out electricity subsidy payments from 2027 as part of efforts to address the sector’s growing debts and establish a more sustainable funding structure.

“I promise you, next year, by God’s grace, we will put a stop to this so-called subsidy in the power sector,” he said during a media interaction.

He also assured Nigerians that ending the subsidy would not mean depriving consumers of electricity or immediately increasing their bills.

However, on September 21, Tegbe pushed back against reports that the government intended to withdraw the subsidy from next year. He said there was no plan to remove the subsidy or increase electricity tariffs, and later added that the government had no immediate plan to raise tariffs.

Nigeria’s Minister of Power, Joseph Tegbe

The difference between the statements has left questions about the government’s precise timeline and approach to electricity subsidy reform. His latest remarks indicate that the government wants to reduce its continued financial exposure to tariff shortfalls, but they do not amount to a fresh announcement that subsidies will end in 2027.

Speaking at the commissioning of a solar hybrid power project at Yakubu Gowon University, formerly the University of Abuja, on September 16, Tegbe said some areas that had experienced prolonged outages were receiving up to 18 hours of electricity daily.

“Some areas called me to say, look, I should slow down, that everything in their freezer is freezing. That is what freezer is meant to do. Let it freeze the food that needs to be frozen,” he said.

The remark was presented as feedback about improved supply in some locations. It was not evidence that electricity had become reliable across the country, and the minister has since acknowledged that many Nigerians are still struggling with unreliable power.

In a statement published on September 22, Tegbe said he understood the frustration of consumers who had not experienced the improvements being reported elsewhere. He said he would not pretend that the sector’s problems had been resolved.

The challenge remains significant. In his latest remarks, Tegbe said the government was dealing with poor revenue collection, inadequate metering, mounting debts owed to power generation companies and losses across the electricity value chain.

He put the outstanding debt to generation companies at about ₦3.3 trillion and said the government had raised funds to address part of the backlog, with plans to complete payments by 2027.

Tegbe also said Nigeria had a metering gap of about 40 per cent and that the government intended to deploy 7.5 million meters over the next two to three years.

The proposed move towards bilateral agreements is intended to make electricity supply more directly dependent on payment, rather than allowing the government to continually cover the gap between what the sector spends and what it collects. However, the impact of any changes will depend on how the market reforms are implemented and how vulnerable consumers are protected.

For now, Tegbe’s latest statement signals that the government wants a more financially sustainable electricity sector. It does not confirm an immediate tariff increase or establish a new deadline for ending electricity subsidies.