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Nigeria considers subsidy to cushion electricity tariff hike

Nigeria’s federal government is proposing a three-year shock relief measure for power consumers in the country, following its plans to increase the electricity tariff from $0.06 per kWh to between $0.11 and $0.15 per kWh.

Barth Nnaji, minister of power, said the government plans to set aside $1.5bn as a subsidy to offset the planned tariff increase.

“The new tariff regime will ensure that consumers are charged cost-reflective tariffs to make the sector attractive for prospective investors in the power sector,” he said.

“To ensure that the government cushions the effect of moving from the current tariff to a cost-reflective tariff, the federal government has committed to providing a subsidy over three years. The Ministry of Finance has promised $0.6m in the first year, $0.6m in the second year, and $0.3m in the third year.”

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