Kehinde Fajobi
Nigeria is looking to attract investors into its struggling power sector by introducing higher electricity tariffs while offering fresh subsidies to cushion households from rising costs.
According to Bloomberg, the government announced at a World Bank energy summit in Tanzania that Nigerians will receive a subsidised 50 kilowatt hours of electricity per month, either through direct consumption or vouchers.
The country is seeking $15 billion in private investments to help fill a $23 billion funding gap needed to revitalise its power sector. This initiative aims to provide electricity to 86 million Nigerians who currently lack access.
Despite having abundant gas reserves, hydro potential, and strong solar energy prospects, Nigeria generates only about 5,000 megawatts of electricity for its over 200 million people.
This has resulted in frequent blackouts and widespread reliance on private generators. In contrast, South Africa, with a population nearly three times smaller, has about 52,000 megawatts of capacity.
The government’s plan includes increasing renewable energy’s share in its electricity mix from 22% to 50% over five years and more than doubling the number of households connected to the grid annually.
By 2027, Nigeria intends to implement a tariff structure that fully reflects electricity production costs while maintaining a buffer for vulnerable households.
Despite removing subsidies for around 15% of mostly urban households last year—a decision that tripled tariffs—the government still spent an estimated ₦2.2 trillion on electricity subsidies.