Nigeria is making a fresh push to attract investors into its struggling power sector by proposing higher tariffs while reintroducing electricity subsidies to shield households from rising costs. At a World Bank energy summit in Tanzania, the government announced plans to provide Nigerians with 50 kilowatt hours of subsidized electricity each month, either through direct consumption or vouchers, in a bid to ease the financial burden.
The country is seeking $15 billion from private investors to bridge an estimated $23 billion funding gap needed to revamp its power sector. With over 86 million Nigerians still lacking electricity, the government aims to increase access while raising the share of renewable energy in the national grid from 22% to 50% within five years. This plan also includes connecting more households to the grid each year.
Despite Nigeria’s vast energy resources, power generation remains at just 13,000 megawatts for its over 200 million people, significantly lower than South Africa’s 52,000 megawatts for a much smaller population. The government plans to implement cost-reflective tariffs by 2027 while maintaining subsidies for vulnerable households. However, last year’s partial subsidy removal for 15% of urban households tripled electricity tariffs, yet the country still spent 2.2 trillion naira on subsidies.
Source: BUSINESS DAY