ABUJA, Feb. 15 (Xinhua) -- Nigeria has announced plans to end subsidies on electricity in a significant policy shift aimed at addressing economic challenges.
Minister of Power Adebayo Adelabu told the media in the capital, Abuja, Wednesday that the decision followed the poor electricity supply situation in the country due to numerous issues including outstanding subsidy debt, and the mounting pressure to reform the country's energy sector and improve fiscal sustainability.
The West African country is currently indebted to the tune of 1.3 trillion nairas (about 857.5 million U.S. dollars) and 1.3 billion dollars owed to gas companies, Adelabu said.
The government had budgeted 450 billion nairas for electricity subsidy this year but over 2 trillion nairas were needed for that, the minister said.
He said state governments will now be allowed to generate power independently to supply power to their states, emphasizing that the proposed subsidy removal was part of broader efforts by the federal government to streamline operations and foster efficiency within the electricity sector.
The announcement has sparked mixed reactions among Nigerians, with some expressing concerns about the potential impact on household budgets, particularly in the face of existing economic challenges. Others, however, view it as a necessary step toward achieving sustainable development and improving the reliability of electricity supply nationwide.
For many years, Nigeria has grappled with the burden of subsidizing electricity, with billions of nairas allocated annually to cushion the impact of high tariffs on consumers.
These subsidies have continued to strain government finances while discouraging private investment in the sector, local industry experts say.
