The Federal Government has unveiled plans to redirect approximately N1 trillion in savings from the removal of electricity subsidies to bolster social services and enhance the power supply nationwide.
During a radio program in Kaduna, Minister of Information Mohammed Idris highlighted the implications of the new electricity act signed by President Tinubu. The act grants the Nigerian Electricity Regulatory Commission (NERC) authority to penalize power distribution companies (Discos) that fail to fulfill their contractual obligations.
Idris emphasized, “The funds saved from eliminating electricity subsidies will be reinvested to improve electricity access across the nation and enhance critical social services like healthcare and education.”
Furthermore, the Minister assured that the Federal Government’s post-fuel subsidy initiatives, including the cash transfer program for vulnerable Nigerians and the provision of CNG buses, remain on course.
Regarding the N25,000 cash transfer program, Idris disclosed that a presidential committee tasked with reviewing its operational framework has submitted its findings, indicating that implementation will commence shortly.
Contextually, through the NERC, the Federal Government recently adjusted electricity tariffs for Band A users, who enjoy a minimum of 20 hours of electricity daily, to N225 per kWh—an approximate 300% increase. This move was justified as a shift to a more cost-reflective tariff, affecting approximately 17% of total electricity consumers who reportedly receive about 40% of the nation’s power supply.
Furthermore, adopting the new cost-reflective tariff is expected to substantially reduce the government’s electricity subsidy expenditure. According to an analysis by Nairametrics, the Federal Government anticipated spending around N1.67 trillion on electricity subsidies in 2024—an increase of about 170% from the previous year. However, with the removal of subsidies for B and A users, this expenditure is projected to decrease by 52% monthly.
