Nigeria Slashes Electricity Subsidies By 35% With Tariff Reform, Easing Financial Strain.
Nigeria has achieved a remarkable 35% reduction in electricity subsidies following a targeted tariff increase implemented last year, Power Minister Adebayo Adelabu announced on Thursday, 17 April 2025. The reform has alleviated significant pressure on public finances in Africa’s most populous nation, marking a step forward in addressing the country’s chronic power sector challenges.
Speaking at a press briefing in Abuja, Adelabu revealed that the tariff adjustment, which eliminated subsidies for the 15% of customers classified as heavier users—such as households and businesses with high electricity consumption—has generated an additional 700 billion naira (£350 million) in revenue. This reflects a 70% increase in market earnings, reducing the government’s tariff shortfall from 3 trillion naira (£1.5 billion) to 1.9 trillion naira (£950 million).
Previously, Nigeria was spending nearly 200 billion naira (£100 million) monthly on electricity subsidies due to commercially unviable tariffs. The targeted reform has not only eased this financial burden but also improved power generation, offering a glimmer of hope for a sector plagued by deep-rooted issues.
Nigeria’s power sector remains hamstrung by a failing grid, gas shortages, high debt, and vandalism, forcing many households and businesses to rely on expensive diesel generators. Despite an installed capacity of 13,000 megawatts, the country typically produces only a third of this, exacerbating energy poverty.
Adelabu’s announcement underscores the government’s commitment to reforming the power sector while balancing fiscal responsibility. The increased revenue is expected to support investments in infrastructure and generation capacity, though significant challenges remain.
As Nigeria navigates these reforms, the reduction in subsidies represents a critical step towards a more sustainable energy future, potentially paving the way for improved electricity access and economic stability for millions of Nigerians.
