The Federal Authorities has introduced plans to share the electrical energy subsidy prices with different tiers of presidency, just like the state and native governments, from 2026, thereby ending the burden of carrying the subsidy within the energy sector.
This was made identified by the Director-Common of the Price range Workplace of the Federation, Tanimu Yakubu, whereas presenting a keynote tackle throughout a coaching and sensitisation workshop for Ministries, Departments, and Businesses (MDAs) on Monday, February 2, 2026, in Abuja.
The coaching programme is on the 2026 post-budget preparation course of utilizing the Authorities Built-in {Financial} Administration Info System Price range Preparation Sub-System.
Yakubu stated the president desires electrical energy subsidy prices to be specific, sensible and clear, warning that no stage of presidency ought to carry hidden or unpaid obligations.
Yakubu famous that this new directive shouldn’t be a punishment however slightly an alignment, including that it may act as an incentive for the totally different ranges of presidency to help cost-reflective effectivity in addition to have an influence market that may ship.
He stated, “If we would like a secure energy sector, we should pay for the alternatives we make. When tariffs are held under value, a spot is created. That hole is a subsidy. And a subsidy is a invoice.”
He added that from 2026, the Federal Authorities would now not deal with electrical energy subsidies as an open-ended obligation borne solely by the centre, particularly the place coverage selections and political advantages are shared.
“In 2026, we are going to cease pretending that this invoice might be left to the Federal Authorities alone, particularly the place the coverage selection or the political profit is shared throughout tiers of presidency,” Yakubu stated.
He famous that the President has instructed that the present electrical energy sector authorized framework be invoked to make sure that subsidy sharing is sensible, clear, and enforceable.
He stated, “This implies subsidy prices have to be specific, tracked, and funded, so they don’t return as arrears, liquidity crises, or hidden liabilities out there. If any tier of presidency chooses affordability interventions, the funding tasks have to be clear, agreed, and enforceable.’’
“This isn’t punishment. It’s alignment. When everybody carries a justifiable share of the price, everybody additionally has an incentive to help cost-reflective effectivity, focused safety for the susceptible, and an influence market that may truly ship,’’ Yakubu added.
The finances workplace boss advised MDAs to absolutely disclose all subsidy-related prices of their 2026 finances submissions and keep away from pushing unfunded liabilities into the electrical energy market.
This new directive by the Federal Authorities will not be unconnected with the debt disaster within the energy sector, with the electricity-generating firms (GenCos) owed over N4 trillion.
In July, President Bola Tinubu, after a gathering with the representatives of electrical energy producing firms in Abuja, accredited a N4 trillion bond initiative aimed toward addressing the liquidity shortfall in Nigeria’s energy sector.
Though some stakeholders have expressed their considerations with this technique over debt-for-debt threat, authorities officers insist the method will stabilise the ability sector and help long-term {economic} progress.
Final week, the Federal Authorities recorded a full subscription for its N501 billion inaugural energy sector bond issued below the Presidential Energy Sector Debt Discount Programme (PPSDRP), signalling sturdy investor confidence in ongoing electrical energy market reforms.
The bond issuance was aimed toward addressing long-standing cost arrears owed to electrical energy technology firms.
President Bola Ahmed Tinubu had, in June 2024, assented to the Electrical energy Act 2023, which was initially handed by lawmakers in July 2022.
The Act will deliver in regards to the de-monopolization of Nigeria’s electrical energy technology, transmission, and distribution of electrical energy on the Nationwide stage and empower states, firms, and people to generate, transmit and distribute electrical energy.
