By John Umeh
The Federal Government is currently spending a staggering ₦200 billion every month to subsidize electricity for Nigerians, according to the Minister of Power, Adebayo Adelabu. The disclosure, which underscores the heavy financial burden of maintaining electricity tariffs below cost-reflective levels, was made during a recent stakeholders’ meeting in Abuja.
Adelabu expressed concern over the sustainability of the subsidy, warning that the growing expenditure is becoming a major strain on government resources. He noted that while subsidies are intended to cushion the impact of high energy costs on citizens, the current approach is not financially viable in the long run.
“We are spending about ₦200 billion every month on electricity subsidies, and this is not sustainable. These are funds that could be invested in improving infrastructure, healthcare, education, and other critical sectors,” the Minister stated.
The Minister’s comments come amid rising tension in the power sector, with frequent complaints from electricity distribution companies (DisCos) about the widening gap between the actual cost of power supply and the regulated tariff. The government has, over the years, maintained subsidies to prevent a sharp increase in electricity bills for consumers, particularly low-income households.
Adelabu reiterated the Federal Government’s commitment to power sector reform, stating that efforts are ongoing to balance affordability for consumers with financial viability for operators. He hinted at a phased approach to subsidy removal, starting with wealthy and high-usage consumers, while protecting the most vulnerable segments of society through targeted interventions.
“The current subsidy structure benefits everyone, including those who can afford to pay full cost. That is something we must fix. We need a more equitable and sustainable model,” he added.
Energy experts have long advocated for subsidy reform, arguing that the funds used to subsidize electricity could be redirected toward upgrading Nigeria’s aging grid infrastructure and expanding renewable energy projects. However, any potential removal or reduction of subsidies has always triggered public concern due to the likelihood of increased tariffs and further pressure on household budgets.
As Nigeria continues to grapple with persistent power supply challenges and fiscal constraints, the debate over electricity subsidy is once again at the forefront of national discourse. The government’s next steps could determine the future of the country’s power sector and its broader economic stability.
