The Federal Government of Nigeria is preparing to increase electricity tariffs “over the next few months,” according to a statement by the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen.
Speaking at the Africa Heads of State Energy Summit in Dar es Salaam, Tanzania, Verheijen outlined the government’s efforts to boost the country’s electricity sector, including a $32 billion initiative aimed at expanding electricity connections by 2030.
While the tariff increase is in the works, Verheijen emphasized the importance of balancing higher rates with subsidies to protect lower-income users.
The Nigerian power sector, she noted, is in dire need of significant investment to meet its development goals.
Currently, Nigeria’s electricity grid can only transmit 8 gigawatts of the 14 gigawatts of installed power, with a mere 4-5 gigawatts reaching households and businesses.
Verheijen pointed out that a major goal is transitioning to a cost-efficient and cost-reflective tariff system that would both generate revenue for the sector and attract private investment.
“The key challenge over the coming months is to make this transition, ensuring that the sector generates the necessary revenue to attract capital while protecting vulnerable populations,” Verheijen stated.
This announcement follows last year’s government-approved tripling of electricity tariffs for customers under the Band A classification.
The decision is largely in response to mounting pressure from Nigeria’s debt-ridden electricity distribution companies, which have long argued that cost-reflective tariffs are essential to improve their financial health.
The tariff hike is also part of a broader strategy by President Tinubu’s administration to reduce state financial burdens and promote private sector participation, which has included the removal of fuel subsidies.
Despite a population of approximately 237 million, Nigeria faces a major electricity access issue, with only 62% of the population having reliable access.
Frequent power outages severely disrupt both productivity and daily life, highlighting the urgency of the government’s reform plans.
