Nigerian Government to Share Electricity Subsidy Costs with States from 2026

The Nigerian Federal Government, through the Budget Office, will begin sharing electricity subsidy costs with state governments from 2026, as announced by the Director-General, Tanimu Yakubu. This decision was made to end the financial burden carried by the power sector.

The government aims to make the subsidy costs explicit, transparent, and aligned with different levels of government support to reflect an efficient power market. The move is not punitive but rather incentivizes transparency and accountability.

President Bola Tinubu has also approved a N4 trillion bond to address the liquidity shortfall in the power sector. The government's recent issuance of a N501 billion power sector bond signals investor confidence in ongoing market reforms and aims to settle outstanding payments to electricity generation companies.

The Electricity Act of 2023, signed by President Tinubu in June 2024, aims to decentralize Nigeria's electricity generation, transmission, and distribution to empower state and private entities.