Although the government has dismissed reports of an imminent power tariff hike, Nigerians have once again been asked to brace for one. It is yet another instance of rising costs in an already strained economy. This is more so when it is coming on the heels of the government’s recent approval for telecom service providers to increase the cost of calls and data.
Despite the government’s denial—an assurance that many Nigerians no longer take seriously—two aspects of this planned electricity tariff hike make it particularly frustrating. First, the nation has failed to resolve the persistent issue of epileptic power supply, forcing most citizens to pay for darkness rather than actual electricity. The feeling of being shortchanged remains a daily reality for many Nigerians, especially those without prepaid metres, who continue to endure blackouts despite their monthly estimated billing.
The second issue is the timing. This hike is being considered at a time when government policies are already squeezing the livelihoods of most Nigerians. With rising inflation, increased transport costs due to the removal of fuel subsidies, and economic uncertainty, the latest development feels like yet another burden on an already struggling population. But this is Nigeria, and as many would say, ‘it is what it is.’
Initially, I was disposed to dismiss the reports of an imminent electricity tariff hike. However, my scepticism changed the moment I read the government’s response to the claim. The President’s Special Adviser on Power, Mrs Olu Arowolo Verheijen, dismissed the reports, stating that they were a misrepresentation of what was actually said. But as British journalist Francis Claud Cockburn famously remarked, “believe nothing until it has been officially denied.”
Ironically, in what appeared to be a justification for the tariff hike, the same Olu Verheijen revealed that the government currently spends a staggering N200 billion every month subsidizing electricity. She claimed that these subsidies primarily benefit only a small fraction of wealthy Nigerians.
She further explained that what consumers currently pay for electricity is only about 65% of the actual cost of supply, even though Band ‘A’ tariffs increased in 2024. As a result, the government supposedly covers the shortfall with an enormous monthly subsidy of N200 billion. However, in a country where the government has consistently lost credibility, many Nigerians remain unconvinced by these figures.
Trust Deficit
There is a longstanding trust deficit between Nigerian citizens and government officials, and to be fair, this scepticism is not exclusive to the current administration. Years of unfulfilled promises, mismanagement, and corruption have left the people wary of official statements, particularly those concerning subsidies.
Successive administrations have claimed to subsidise essential services such as electricity, fuel, and even health care delivery. However, these subsidies have often served as a conduit for corruption, benefiting a select few at the expense of the masses.
For instance, during his inauguration in May 2023, President Bola Ahmed Tinubu declared that the fuel subsidy was “gone” because it was no longer sustainable. He assured Nigerians that only a few privileged individuals had been benefiting from it. However, months after the supposed removal, it has become evident that the full picture of the fuel subsidy situation remains unclear. Now, the same government is talking about another massive subsidy—this time in the power sector. Are Nigerians being deceived again?
The Power Supply Puzzle
Nigeria currently generates approximately 5,400 megawatts of electricity for a population exceeding 200 million people. This is woefully inadequate. A 2022 report on total energy supply per capita in Africa did not even place Nigeria in the top ten despite the country’s vast natural resources. Leading the list were Libya, Gabon, South Africa, Algeria, and Egypt, among others.
The lack of a stable power supply is one of Nigeria’s most significant infrastructure challenges, stifling the growth of businesses—particularly small and medium enterprises that depend on reliable electricity to thrive. Despite being blessed with gas and crude oil, Nigeria is ranked among countries with a high number of people living without electricity. Approximately 86 million Nigerians do not have access to power, making the nation the global leader in electricity deficit.
Beyond the numbers, the story of Nigeria’s power sector is riddled with corruption. Over the years, billions of naira have been allocated to improving electricity supply, yet much of this money is either mismanaged or outrightly stolen. The consequences of this inefficiency are dire.
Industries are shutting down due to high energy costs, and foreign investors remain hesitant to invest in a country with an unpredictable power supply. According to the Manufacturers Association of Nigeria, industries spent N93.1 billion on alternative energy sources in just one year.
The power sector crisis is exacerbated by two fundamental issues: accessibility and affordability. Despite supposed investments in the sector, low-income earners in urban slums and rural areas remain largely without access to electricity. The Rural Electrification Agency has promised to provide power to 25 million Nigerians within three years, but until that promise is fulfilled, the reality remains bleak. Most Nigerians continue to rely on generators with all the costs to meet their basic energy needs.
Another Tariff Hike?
Why should Nigerians not be alarmed about another tariff increase when the one implemented in 2024 has already disrupted essential services such as education and healthcare?
No thanks to the last tariff hike, health centres and universities are struggling with increased electricity costs. The Academic Staff Union of Universities (ASUU) warned that many institutions were on the verge of shutting down due to the unbearable cost of power.
One example that readily comes to mind is Ahmadu Bello University (ABU), Zaria, which had to seek direct intervention from President Tinubu after its annual electricity bill surged to N3.6 billion. Expecting a university to pay about N300 million per month for electricity is simply unthinkable.
Like ABU, the University College Ibadan (UCH) is also battling a power outage due to unpaid electricity debt of about N3.1billion. This has negatively impacted patients who visit the hospital to access medical services
If educational and health institutions are struggling, one can only imagine how small businesses and ordinary households are coping.
Given the harsh economic realities, the very least the government can do is to protect schools and healthcare institutions from the crippling effects of rising electricity costs. Instead of another tariff hike, policies should be tailored to alleviate the suffering of the masses, not add to it.
Needed: Full Disclosure
Beyond the rhetoric, what tangible steps is the government taking to fix the power sector? Year after year, successive administrations have promised to address Nigeria’s electricity woes, yet the country remains stuck in a vicious cycle of poor supply and high costs.
Ahead of the 2023 elections, then-candidate Tinubu made electricity reform a core part of his campaign promises. In his January 2024 address, he acknowledged that meaningful economic transformation is impossible without stable electricity and vowed to ensure a reliable power supply. One year later, Nigerians are still grappling with erratic power.
Now, almost two years into his administration, we are being told that a staggering N200 billion is spent every month on electricity subsidies. Yet, consumers continue to experience high tariffs coupled with abysmal supply.
Perhaps it is time for Nigerians to demand transparency. How exactly is the N200 billion monthly subsidy being spent? How much of it goes to the Distribution Companies (DisCos) and the Generation Companies (GenCos)? Why, despite such a huge expenditure, does the power supply remain unreliable?
Scepticism will persist until the government provides clear answers to these pressing questions. Nigerians deserve full disclosure. Until then, the reality remains that my compatriots continue to pay more for less power.
