The Federal Government of Nigeria has spent a staggering ₦1.94 trillion on electricity subsidies in 2024, marking a sharp 219.67% increase from the ₦610 billion recorded in 2023.
This revelation was made in the latest report by the Nigerian Electricity Regulatory Commission (NERC), which highlighted the growing financial strain on the government as it continues to shield consumers from paying cost-reflective tariffs.
Despite the Band A tariff hike introduced in April 2024, subsidy spending has increased significantly, driven largely by macroeconomic factors such as the floating of the naira and the removal of fuel subsidies, which have further exacerbated inflation and raised the cost of power generation and distribution.
According to NERC, the government’s subsidy is used to bridge the gap between the actual cost of supplying electricity and the regulated prices paid by consumers. However, only ₦371.34 million, or 0.019% of the total obligation, had been paid as of the time of reporting.
“Due to the absence of cost-reflective tariffs across all DisCos in 2024, the government incurred a subsidy obligation of ₦1.94 trillion, which translates to an average of ₦161.85 billion per month,” NERC stated.
The regulator added that the subsidy accounted for 62.59% of the total invoices issued by the Nigerian Bulk Electricity Trading Company (NBET) to Distribution Companies (DisCos) in 2024.
In comparison, the 2023 subsidy bill stood at ₦610.06 billion, covering 47.08% of NBET’s invoices, while DisCos were mandated to remit 52.92% of the ₦1.29 trillion billed that year.
The rising subsidy figures underscore the federal government’s ongoing struggle to balance energy affordability with fiscal sustainability—a concern that continues to fuel debate around electricity pricing and sector reforms in Nigeria.
