Economic hardship: Anxiety as Tinubu govt considers electricity subsidy removal

Nigerians are growing increasingly concerned as the government led by President Bola Ahmed Tinubu considers ending electricity subsidies despite the worsening economic challenges citizens are facing. During a briefing on February 14, 2024, Minister of Power Adebayo Adelabu highlighted the government’s inability to sustain electricity subsidies, given its mounting debt of N3 trillion. Adelabu’s statement has sparked alarm among Nigerians, who fear that removing electricity subsidies will compound the hardships they already endure due to the removal of fuel subsidies and currency devaluation.

With the cost of living soaring and inflation reaching a record high of 29.90 percent in January 2024, the removal of electricity subsidies would exacerbate the difficulties for most Nigerians. The International Monetary Fund has advised Nigeria to end electricity subsidies, similar to its recommendations regarding fuel subsidies and currency devaluation. This dilemma leaves Nigeria with the choice of either adopting cost-reflective electricity tariffs or persisting with the subsidy regime.

According to the Nigerian Electricity Regulatory Commission, the country has spent N2.8 trillion on electricity subsidies from 2015 to 2022, with N600 billion allocated in 2023 alone. Despite repeated tariff increases, electricity supply remains unreliable due to various challenges within the power sector, including inadequate infrastructure and operational inefficiencies.

In light of these challenges, the Minister of Power clarified that the government has not definitively decided to remove electricity subsidies. He emphasized the need for all possible solutions to be considered and ultimately decided upon by President Tinubu and the Nigerian people. The Minister stressed that if the government cannot sustain electricity subsidies, the decision should be made transparently in consultation with the populace.

However, critics argue against removing electricity subsidies, fearing it would intensify the hardships faced by Nigerians. They urge the government to focus on improving service quality rather than burdening citizens with increased tariffs. Concerns are raised about potential unrest and instability if the government proceeds with subsidy removal without addressing the underlying issues within the power sector and providing necessary support to alleviate citizens’ hardships.