FG to phase out electricity subsidy from 2027 as power sector debts rise

The Federal Government has announced plans to gradually phase out electricity subsidies from 2027 as part of efforts to address rising debts in the power sector, improve financial sustainability and strengthen electricity supply across the country.

Minister of Power Joseph Tegbe disclosed the plan during a media interactive session on Friday, saying the government would introduce the changes gradually while ensuring that Nigerians continue to have access to electricity.

Tegbe said the Federal Government had received a mandate from President Bola Tinubu to clear outstanding debts in the electricity industry and establish a sustainable system that would prevent the accumulation of new obligations.

“We have the mandate of Mr President to clear the legacy debt and come up with sustainable structures to make sure this doesn’t pile up any more,” the minister said.

He expressed confidence that the government would bring an end to the current electricity subsidy arrangement in 2027 while working to improve the quality and reliability of power supply.

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

The minister assured consumers that the planned reforms would not result in a loss of access to electricity services.

According to him, the government’s objective is to reduce the financial burden created by the subsidy system while improving the performance of the electricity sector.

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“Mr President, we will not deprive Nigeria of anything. We’ll make sure Nigerian consumers continue to have power and improve power services,” he added.

Tegbe also stated that there was no immediate plan to increase electricity tariffs, despite concerns that the proposed phase-out of subsidies could lead to higher electricity bills.

However, the minister did not provide details on the timetable for the subsidy withdrawal, the categories of consumers that may be affected or the measures that would be introduced to protect low-income and vulnerable households.

The planned reform comes amid growing concerns over the financial challenges facing Nigeria’s electricity industry.

The Federal Government previously estimated the cost of electricity subsidies at about ₦3 trillion as of February 2024, while power generation companies, known as GenCos, have continued to report significant unpaid obligations.

The Association of Power Generation Companies has said electricity generation companies are owed about ₦6.5 trillion, raising concerns about the financial health of the sector and its ability to sustain electricity generation.

The outstanding debts include unpaid invoices and other obligations linked to electricity supplied to the national grid.

To address the problem, President Tinubu recently approved a ₦4 trillion power sector debt reduction programme aimed at settling verified legacy debts and improving liquidity across the electricity value chain.

The programme is expected to support the payment of outstanding obligations owed to power generation companies and other participants in the sector.

In January 2026, the Federal Government issued an inaugural ₦501 billion bond under the Presidential Power Sector Debt Reduction Programme.

The bond was designed to help settle verified debts owed to electricity generation companies and support efforts to stabilise the sector.

On July 20, the government announced a second tranche of about ₦729 billion to settle additional verified debts owed to power generation companies.

The debt-settlement programme is expected to reduce financial pressure on electricity producers and improve their capacity to maintain operations, pay gas suppliers and invest in power infrastructure.

The proposed subsidy phase-out also aligns with recommendations by the International Monetary Fund (IMF), which has encouraged Nigeria to gradually reduce broad electricity subsidies and adopt more targeted support for households that need assistance.

Supporters of the reform argue that reducing subsidies could improve the financial viability of the electricity market, attract private investment and help power companies maintain and expand infrastructure.

However, consumer groups and businesses have raised concerns that higher electricity costs could increase financial pressure on households and raise operating expenses for companies.

The impact of the proposed reform may depend on the government’s ability to improve electricity supply, expand access to prepaid meters, reduce estimated billing and ensure that consumers receive better services.

Earlier this year, President Tinubu also directed ministries, departments and agencies to apply existing electricity laws in determining how subsidy costs should be shared among the federal, state and local governments in the 2026 budget.

The move is expected to support a more coordinated approach to electricity financing following reforms that expanded the role of state governments in electricity generation, transmission and distribution.

As the 2027 target approaches, the Federal Government is expected to provide more details on the implementation framework, consumer protection measures and the steps that will be taken to prevent the reforms from causing undue hardship.

The government will also face growing pressure to ensure that improvements in electricity generation, transmission and distribution accompany the gradual withdrawal of subsidies.

For many consumers, the success of the policy may ultimately be measured by whether it delivers more reliable electricity, fair billing, improved customer service and better value for money.

FG to phase out electricity subsidy from 2027 as power sector debts rise

Police detain Osun SSG, five others as ₦4.8m, voter cards are recovered

The Osun State Police Command has detained the Secretary to the State Government, Teslim Igbalaye, alongside five other persons following a police operation at his residence in Osogbo.

Police said the operation was based on intelligence indicating that suspected members of a criminal gang were allegedly hiding at the property.

During the raid, officers reportedly recovered ₦4,810,500 in cash, two Permanent Voter Cards (PVCs), a voter register covering Wards 1 to 15, a Dynabook laptop, a photocopy machine and a printer.

The police said the recovered items had been secured and placed in custody for forensic examination and further investigation.

In a statement issued by the Police Public Relations Officer, Abiodun Ojelabi, the command identified the other persons arrested as Akande Taiwo, Oladele Abiodun, Adeyemo Lukman, Olaoye Muftau and Aderemi Musliu.

According to the police, one of the suspects, Oladele Abiodun, was already on its watchlist in connection with alleged criminal activities.

The command said the recovery of the cash and voter-related materials raised concerns about possible electoral offences, including alleged vote-buying, as political activities intensify ahead of the August 15, 2026, Osun State governorship election.

Police said preliminary findings provided grounds to investigate possible offences under the Electoral Act 2022, including alleged vote-buying, criminal conspiracy and harbouring or concealing a wanted suspect.

The command added that investigators were working to determine the source and intended use of the recovered money, identify all persons connected to the items and establish whether a wider criminal network was involved.

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“The recovery of the cash and the register containing voters’ details raises serious concerns regarding possible electoral offences and other criminal activities,” the police said.

The command stressed that the investigation was ongoing and that no individual would be treated as above the law because of political affiliation, social status or public office.

It added that anyone found culpable after the investigation would be prosecuted in accordance with the law.

However, the Osun State Government criticised the operation and accused the police of invading the residence of the SSG without obtaining a valid search warrant.

In a statement signed by the Commissioner for Information and Public Enlightenment, Kolapo Alimi, the state government alleged that a combined team of police officers, led by the Deputy Commissioner of Police in charge of Operations, forced its way into the residence and arrested people present at the property.

The government also alleged that the operation was part of coordinated raids and increased police surveillance targeting senior officials in the administration of Governor Ademola Adeleke.

According to the state government, Igbalaye was attending an election stakeholders’ meeting organised by the Independent National Electoral Commission (INEC) when the police operation took place.

The government further claimed that ward officials were holding a meeting within the premises at the time of the raid.

The Osun government described the operation as politically motivated and called on the police to act professionally and impartially as the state approaches the governorship election.

The police, however, maintained that the operation was intelligence-led and linked to an ongoing criminal investigation.

In a subsequent update, the police said those arrested would be screened and that anyone found not to be connected to the investigation would be released.

The incident has heightened political tension in Osun State, where parties have intensified mobilisation ahead of the August 15 governorship election.

The All Progressives Congress (APC) has expressed confidence that it will regain control of the state, while supporters of Governor Adeleke have maintained that the outcome of the election will be decided by voters.

As of the time of filing this report, the police had not announced the conclusion of the investigation or disclosed whether any of the detained persons would be formally charged.

The investigation remains ongoing.

Police detain Osun SSG, five others as ₦4.8m, voter cards are recovered