Nigerian Government to Share Electricity Subsidy Costs with States by 2026

The Federal Government of Nigeria is implementing a new framework to share electricity subsidy costs with states, aiming to end the practice of bearing the subsidy burden alone. Tanimu Yakubu, the Director-General of the Budget Office, disclosed this during a sensitization workshop in Abuja.

The move is part of efforts to spread the financial responsibility across federal, state, and local governments by 2026. Yakubu emphasized the need for a transparent and enforceable mechanism to track and share subsidy costs effectively, aligning incentives and promoting efficiency in the power sector.

This shift in policy is intended to prevent hidden liabilities and financial crises in the power market, ensuring that all tiers of government contribute fairly to the subsidy costs. The government also plans to review fiscal responsibility frameworks and introduce clearer fiscal anchors to enhance budget credibility and delivery.