The Federal Government has confirmed plans to gradually eliminate electricity subsidies and fully implement cost-reflective tariffs across Nigeria’s power sector.
Special Adviser to the President on Power Infrastructure, Sadiq Wanka, made the announcement during the Asharami Square 3.0 event organised by Sahara Group in Lagos on Wednesday, July 22, 2026.
Wanka acknowledged that the shift to cost-reflective pricing is one of the most sensitive issues in the sector. He noted that the government has already begun the process with Band A customers and intends to extend it to other categories within the next year, alongside measures to protect vulnerable households through a proposed Power Consumer Assistance Fund.
Addressing Investment Shortfall
Wanka highlighted that Nigeria’s electricity industry still lags behind many comparable emerging economies. The country currently attracts around $1 billion in annual investment across generation, transmission, and distribution far below the $9 billion to $12 billion required yearly through 2045 to achieve universal access and meet growing industrial demand.
He estimated that total investment needs for the sector could reach approximately $121 billion over the next two decades.
Implications for Consumers and Economy
The planned removal of subsidies is likely to increase power bills for many households and businesses in the short term. However, the government has pledged to cushion the impact on low-income groups through targeted support via the Power Consumer Assistance Fund.
For businesses, more reliable electricity supply driven by higher investment could reduce reliance on expensive diesel generators, potentially lowering operating costs and supporting the naira by reducing demand for imported fuel.
The announcement reflects the government’s commitment to addressing long-standing challenges in the power sector through a combination of tariff reform, consumer protection measures, and significantly increased investment. The success of this transition will be critical for improving electricity access and supporting Nigeria’s broader economic growth objectives.
