The Federal Government has ruled out another increase in electricity tariffs, saying its immediate priority is to improve power supply, stabilise the electricity market and address financial and infrastructure weaknesses across the sector.
Minister of Power, Joseph Tegbe, gave the assurance during an interactive session with power correspondents in Abuja marking his first 100 days in office, amid concerns about electricity costs and the financial sustainability of Nigeria’s power industry.
Tegbe said the government does not intend to place additional financial pressure on consumers through higher tariffs while fundamental problems affecting generation, transmission and distribution remain unresolved.
“Let me categorically state — and this is not a political statement — we have no plan to increase electricity tariffs,” the minister said.
Instead, he said the administration would concentrate on restoring market discipline, improving governance and strengthening the financial and physical foundations required to deliver more reliable electricity.
FG Confronts ₦3.3tn Power-Sector Debt
One of the biggest challenges confronting the industry remains its accumulated financial obligations.
Tegbe said the government had raised ₦1.23 trillion to settle part of an estimated ₦3.3 trillion debt within the electricity sector.
Resolving the debt burden is important because unpaid obligations across the electricity value chain can affect the ability of generation and other companies to maintain infrastructure, secure fuel, obtain financing and invest in additional capacity.
The minister argued that Nigeria’s electricity problems cannot be solved simply by adding more generation capacity.
He said weaknesses are interconnected across the entire value chain, meaning improvements in generation must be accompanied by adequate transmission infrastructure and stronger distribution networks capable of delivering electricity to homes and businesses.
That distinction is important because Nigeria has frequently recorded a gap between installed generation capacity and the amount of electricity that can actually be transmitted and distributed to consumers.
Government Targets Stronger Electricity Value Chain
The Federal Government’s latest position suggests that the next phase of power-sector reform will place greater emphasis on strengthening the industry’s underlying structure rather than relying primarily on tariff adjustments.
Tegbe said the administration wants to improve supply while establishing a more sustainable commercial framework.
That includes addressing financial obligations, strengthening governance and ensuring the different sections of the electricity value chain can operate more effectively together.
The government faces the challenge of balancing those objectives with affordability.
Electricity tariffs remain a sensitive issue for households and businesses already confronting elevated operating and living costs, while electricity companies require sufficient revenue to maintain infrastructure and finance expansion.
The minister’s statement provides a clear short-term position that another tariff increase is not currently planned.
It does not, however, remove the longer-term question of how the sector will recover costs while expanding supply and reducing its dependence on government financial interventions.
Renewable Energy Investment Expands
The government’s power-sector strategy is also increasingly incorporating decentralised electricity generation.
Nigeria recently commercially launched a $300 million Distributed Renewable Energy Fund designed to attract investment into off-grid and distributed renewable-energy projects, particularly for communities and businesses that remain underserved by the national grid.
The initiative reflects the government’s attempt to address electricity shortages through a combination of traditional grid infrastructure and smaller distributed energy systems.
Nigeria’s power challenges affect virtually every part of the economy because unreliable electricity forces households and businesses to rely heavily on alternative sources, including petrol and diesel generators and private renewable-energy systems.
Improving grid reliability could therefore have implications beyond household electricity access, particularly for manufacturers, small businesses, technology companies and other energy-intensive industries.
For now, Tegbe said the government’s approach would focus on correcting weaknesses within the electricity market before asking consumers to bear additional costs.
Whether that strategy succeeds will depend substantially on improvements in actual electricity supply, debt resolution and the ability of operators across generation, transmission and distribution to translate reforms into more reliable power for consumers.
