- The Federal Government will spend N2.4 trillion on electricity subsidies in 2025, benefiting 30% of Nigerians in urban areas despite erratic power generation.
- Wealthy Nigerians benefit most from subsidies, prompting the government to introduce a targeted system for low-income households.
- Monthly subsidies total N200 billion, but power outages remain a significant concern without further sector reforms and investments.
The federal government (FG) will allocate N2.4 trillion to subsidise electricity in 2025, covering about 30% of Nigerians in urban areas. Despite the funding, the power sector struggles with erratic generation and heavy losses from distribution companies (DisCos).
Olu Verheijen, Special Adviser to the President on Energy, clarified her recent comments about power reforms. She noted that people misunderstood her statements and explained that the government spends N200 billion monthly on electricity subsidies.
“In a recent interview, I explained that after the Band A tariff hike in 2024, current tariffs cover 65% of the electricity supply cost. The government covers the rest,” Verheijen said.
She outlined government priorities, focusing on improving electricity supply, reducing outages, and protecting low-income Nigerians. These initiatives include rolling out 7 million prepaid meters to stop estimated billing, restructuring subsidies to assist low-income households, and settling debts owed to generation companies.
Verheijen pointed out that wealthy Nigerians, rather than those in need, benefit the most from subsidies. The federal government plans to introduce a targeted subsidy system that directs support to low-income households to address this.
“This new approach will make electricity more affordable and accessible to millions of hardworking families,” she said.
The Nigerian Electricity Regulatory Commission (NERC) provided a breakdown of subsidy distribution. Abuja Electricity Distribution Company (AEDC), which covers the FCT, Niger, and parts of Nasarawa, will receive N29.1 billion monthly.
Eko Electricity Distribution Company (EKEDC) in Lagos will receive N22.42 billion, while Ikeja Electric (IE) will receive N26.68 billion. Port Harcourt Electricity Distribution Company (PHED), which operates in the South, will receive N14.84 billion, and Benin Electricity Distribution Company (BEDC) will collect N16.46 billion.
Enugu Electricity Distribution Company (EEDC) in the South-East will receive N16.12 billion. In the North, Jos Electricity Distribution Company (JED) will receive N12.77 billion, Kaduna Electricity Distribution Company (KAEDC) will get N14.49 billion, Yola Electricity Distribution Company (YEDC) will collect N8.63 billion, and Kano Electricity Distribution Company (KEDCO) will receive N13.58 billion.
Ibadan Electricity Distribution Company (IBEDC), which serves urban areas, will receive N24.55 billion. These subsidies total N200 billion monthly, adding up to N2.4 trillion annually.
However, despite these significant subsidies, Nigeria’s power generation remains unreliable. As 2025 approaches, many Nigerians will continue to endure frequent power outages. While the government provides financial relief through subsidies, the power sector needs substantial reforms and investments in infrastructure to ensure stable electricity for all. Without addressing these core issues, consumers will continue to face poor electricity supply despite ongoing government support.