The federal government of Nigeria has announced plans to remove electricity subsidies, meaning citizens should prepare for higher electricity bills in the near future. The minister of power, Adebayo Adelabu, said this during a press briefing on Sunday, while also addressing the N4 trillion debt owed to power generation companies (GenCos).
According to the News Agency of Nigeria, Adelabu stated that a meeting has been scheduled between President Bola Tinubu and GenCos to reach a resolution on the mounting debt. A significant portion of the debt will be paid immediately, while the rest will be settled using financial tools such as promissory notes within six months.
Adelabu warned that the power sector is facing severe challenges and could collapse without urgent government intervention. He assured GenCos that the administration is committed to stabilizing the system and removing obstacles hindering its performance.
As part of long-term solutions, the minister said the government is working toward full deregulation of the electricity market. This includes adopting cost-reflective tariffs and reducing blanket subsidies, while still providing targeted support for low-income households.
He also said that existing regulations would be reviewed to lower levies and strengthen the electricity market. Additionally, he urged GenCos to support efforts aimed at educating the public on efficient electricity usage and tariff structures.
Power companies expressed deep concern about the current situation, pointing to chronic liquidity problems, difficulty maintaining infrastructure, and an inability to repay loans. The depreciation of the naira, irregular gas supply, and recurring grid failures have worsened the crisis.
“Without urgent intervention, the entire power ecosystem could collapse,” said Col. Sani Bello (Rtd), chairman of Mainstream Energy Solutions and the Association of Power Generation Companies.
The federal government has acknowledged its role in the sector’s current state and says it is ready to make necessary changes. Officials stress the need for collaborative efforts to avoid a complete breakdown of Nigeria’s electricity supply system.
Article updated 2 weeks ago. Content is written and modified by multiple authors.
