States to Share Electricity Subsidy Burden with Federal Government
The Federal Government of Nigeria, led by President Bola Ahmed Tinubu, has directed all Ministries, Departments, and Agencies (MDAs) to clearly define how electricity subsidy costs will be shared among the Federal, State, and Local Governments in the 2026 budget.
This move aims to ensure that the burden of electricity subsidies is no longer borne solely by the Federal Government.
According to the Director-General of the Budget Office of the Federation, Tanimu Yakubu, the President wants the sharing of power subsidy costs to be clear, practical, and open, to prevent any level of government from carrying hidden or unpaid costs.
Yakubu emphasized that subsidy costs must be explicit, tracked, and funded, so they do not return as arrears, liquidity crises, or hidden liabilities in the power market .
The decision is part of efforts to reform the power sector and ensure its sustainability. The Federal Government has been struggling to pay its subsidy obligations, with the total subsidy obligation standing at N1.94 trillion in 2024, and a projected N2.36 trillion for 2025.
Under the new framework, states will be required to reflect electricity costs in their tariffs or pay subsidies to cover any shortfall. This move is expected to improve accountability and encourage stronger commitment to reforms in the electricity sector . #States to Share Electricity Subsidy Burden with Federal Government#
