The Federal Government has reaffirmed its commitment to gradually removing electricity subsidies and implementing cost-reflective tariffs across the power sector while providing targeted support for vulnerable households.
The Special Adviser to the President on Power Infrastructure, Sadiq Wanka, disclosed this on Wednesday during the Asharami Square 3.0 forum in Lagos.
The event, organised by Sahara Group, focused on the theme, “Energising Africa’s Future: Legacy, Impact and Transformation.”
Wanka described cost-reflective tariffs as one of the most difficult but necessary reforms required to attract investment and improve the sustainability of Nigeria’s electricity market.
“There’s a conversation also around cost-reflective tariffs. Again, probably the most frustrating topic when you talk to investors and when you talk to market participants,” he said.
According to him, the transition has already begun with the implementation of cost-reflective tariffs for Band A customers and will eventually extend across the sector.
“It’s official government policy that there would be a transition to cost-reflective tariffs across the board with protections for vulnerable households. So I believe that’s something that should happen probably in the next year or so,” Wanka stated.
He explained that the government intends to cushion the impact of the reforms through the proposed Power Consumer Assistance Fund, which will provide support to low-income and vulnerable consumers.
The presidential aide noted that Nigeria continues to lag behind several developing countries in terms of electricity access, infrastructure and per capita power consumption.
However, he expressed optimism that ongoing reforms and increased investment could significantly improve the situation over time.
According to Wanka, Nigeria currently attracts approximately $1 billion annually in electricity sector investments, whereas between $9 billion and $12 billion is required yearly to meet universal electricity access targets and support industrial growth.
He said the Electricity Act 2023 has created a more favourable environment for investment by liberalising the sector and allowing greater participation by state governments.
The adviser also identified embedded generation, mini-grids, transmission projects, hydropower developments and local manufacturing of electricity equipment as major investment opportunities.
Earlier, Sahara Group’s Executive Director of Governance and Sustainability, Ejiro Gray, called for a more balanced and context-driven approach to reporting Africa’s energy transition.
She argued that African energy narratives should reflect the continent’s realities rather than relying solely on assumptions developed elsewhere.
Industry stakeholders say the transition to cost-reflective tariffs remains a critical component of efforts to improve liquidity, attract private capital and ensure the long-term viability of Nigeria’s electricity market.
