The Federal Government has announced plans to raise electricity tariffs soon.
President Bola Tinubu’s Special Adviser on Energy, Olu Verheijen, revealed this during an interview in Tanzania, as reported by Bloomberg.
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| FG Plans Electricity Tariff Increase in Coming Months |
At a World Bank-backed conference, Nigeria presented a $32 billion plan to improve electricity access by 2030. Private investors are expected to contribute $15.5 billion, with the rest coming from public sources like the World Bank and the African Development Bank.
Verheijen stated that electricity tariffs must rise by about two-thirds for many consumers to reflect actual supply costs. She emphasized that higher tariffs—balanced with subsidies for lower-income households—are crucial for maintaining infrastructure, improving reliability, and attracting private investment.
“One key challenge is transitioning to a cost-reflective yet efficient tariff,” she said. “This will generate revenue to attract private capital while protecting vulnerable citizens.”
The proposed hike follows increasing pressure from Nigeria’s electricity distribution companies, which argue that current tariffs do not cover supply costs. Despite privatization in 2013, government subsidies are still required, making profitability difficult.
Nigeria’s power sector needs major investment. Of the country’s 14-gigawatt installed capacity, only 8 gigawatts can be transmitted, and just 4–5 gigawatts reach homes and businesses.
To address these issues, Siemens AG is working with the government on a $2.3 billion project to enhance transmission and distribution. Additionally, over 7 million rural Nigerians now have access to decentralized renewable energy.
Verheijen linked energy policies to Nigeria’s broader economic ambitions. “Our goal is a $1 trillion economy in five years and upper-middle-income status in 25 years,” she said. Nigeria’s GDP is currently under $200 billion, according to the IMF.
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