FG to review electricity tariffs for Band B, C customers as subsidy hits N4tr
• Govt defends 50% telecom tariff hike, says it’s to prevent sector collapse
• We can’t cope with high electricity tariff, NIMR cries out
As beleaguered Nigerians brace up for a hike in rates across major service sectors beginning from tomorrow, March 1, such as the new ATM charges and telecom tariffs, the federal government yesterday announced plans to review electricity tariffs for Band B and C customers as part of efforts to improve the power sector and encourage investment.
The Minister of Power, Adebayo Adelabu, revealed this during the public presentation of the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan (NIRP) in Abuja.
Adelabu clarified that the review does not necessarily mean an increase in tariffs but rather an assessment to enhance last year’s progress and ensure the sector’s growth.
He stated that the government aims to invest in upgrading the country’s dilapidated power infrastructure. He also expressed concern over the slow migration of customers to Band A, attributing the delay to the lack of investment from electricity distribution companies (DisCos).
According to him, the government is considering reducing the electricity tariff shortfall by increasing some end-user payments as the subsidy burden mounts in the power sector. The government also noted that the disparities in the billing system remained wide and must be bridged to encourage investment.
The government revealed that over N4 trillion is owed to electricity generation (GenCos) and distribution companies (DisCos), raising concerns about the sector’s sustainability.
The Bands B–E tariffs had been frozen for about two years, with the government covering subsidies. Under the February Multi-Year Tariff Order (MYTO) issued by the Nigerian Electricity Regulatory Commission (NERC), Band A customers, who receive the most stable electricity supply, saw their rates drop from N225/kWh in April to N206.80/kWh in May–June, before rising slightly to N209.50/kWh from July 2024 to February 2025. Other bands pay significantly lower rates, with Band B customers charged N65–71/kWh, Band C N47–54/kWh, and Bands D and E around N32–47/kWh.
Adelabu described this current pricing structure as “unfair”, noting that Band B customers, who receive 17–18 hours of electricity daily, pay N63/kWh, while Band A customers, with just two additional hours of supply, pay N209/kWh. He stressed that the tariff review would not necessarily mean an increase but rather a restructuring to ensure fairness and boost investment in the sector.
The minister further disclosed that the federal government owes N2 trillion to GenCos as legacy debt, an additional N1.9 trillion in electricity subsidies for 2024, and N450 billion to DisCos. He warned that the government could not sustain this subsidy model and would introduce a targeted approach to ensure that only those in need benefit.
“How do you expect the GenCos to perform optimally when they struggle to pay for gas, maintain their turbines, and settle staff salaries due to these debts?” Adelabu questioned.
Reflecting on the past year, he highlighted achievements such as the development of the NIEP, attracting over $1 billion in investments, increasing power generation from 4,200MW to 5,300MW, and expanding transmission capacity by 600MW through the Presidential Power Initiative (PPI). Additionally, N700 billion was raised through the Federation Account Allocation Committee (FAAC) to implement the Performance Management Initiative (PMI).
Looking ahead to 2025, he outlined key priorities, including market liquidity, state-led electricity implementation, strengthening the Transmission Company of Nigeria (TCN), and advancing the “Mission 300” initiative to enhance electricity supply.
Adelabu also acknowledged the metering gap, noting that over six million Nigerians lack meters, though three million meters are expected to be deployed soon. He criticised DisCos for failing to invest in the sector and reaffirmed the government’s commitment to reforming the electricity market to be private-sector driven.
“We generated and transmitted 5,570MW last month without grid collapse, and we can still accommodate 2,000MW more due to improvements from the Presidential Power Initiative,” he stated.
This is as the Nigerian Institute of Medical Research (NIMR), Yaba, Lagos, has again expressed worry over the high electricity bills being charged by the Eko Electricity Distribution Company (EKDC). The Director-General of the institute and professor of forensic pathology, John Obafunwa, raised the concern at the institute’s monthly media briefing in Lagos, lamenting that the huge electricity bills are suffocating the institute.
According to him, “Our monthly bill from EKDC is too high, and we cannot cope with it as an institute.” Regarding recent electricity bills, Obafunwa said, “We paid EKDC about N49 million in August last year, N48 million in September, N44 million in October, N34 million in November, and N43 million in December.”
He emphasised that the institute could not sustain such huge bills, which are under the newly introduced Band A tariff circle, calling on EKDC and the government to address the concern in the interest of millions of Nigerians who benefit from the institute’s services.
Similarly, the federal government defended the decision to approve a 50 per cent tariff increase for telecommunications services, saying that failure to do so could have led to job losses and the collapse of some companies in the sector. According to it, the decision aims to ensure the sector’s sustainability amid rising operational costs and economic challenges.
The Minister of Communications and Digital Economy, Bosun Tijani, made the clarification while addressing newsmen at the Presidential Villa, Abuja yesterday. He said: “If we chose not to allow the increase in tariff, we would be at the risk of losing jobs, as some of these companies could pack up, and when you weigh that, it’s also not the best thing for the economy,” the minister said.
Tijani explained that the government had considered the decision, following the critical role the telecom sector plays in the country’s economy. He noted that the sector, including its entire value chain, employs nearly half a million Nigerians, making it a significant contributor to national development.
The Minister revealed that the tariff increase request had been pending before the current administration took office, but President Bola Tinubu had insisted on a thorough evaluation before approving any adjustments.
“This is a government that is extremely conscious of the state of the economy, and Mr. President consistently takes into consideration each and every citizen before making decisions. Some of these decisions are difficult, but we have to balance the interests of individuals and businesses alike,” he said.
“To determine the optimal rate for the adjustment, the government commissioned a study led by KPMG, which provided insights into the most sustainable tariff increase.”
Tijani emphasised that the government’s focus extends beyond affordability to ensuring “meaningful access” to telecommunications services. “This involves not only providing connectivity but also guaranteeing high-quality service delivery, ensuring that Nigerians receive the full benefits of digital connectivity.
“The NCC has been working to shift the focus not just to quality of service but to quality of experience. Now that the MNOs have the opportunity to increase tariffs, they must ensure that quality remains a priority,” he stated.
To achieve its objectives, the Minister highlighted the government’s continued investment in telecommunications infrastructure to enhance connectivity and support economic growth across the country.
“These include the expansion of Nigeria’s fibre-optic network by 90,000 kilometres and the recent approval by the Executive Council for the construction of 7,000 additional telecom towers in rural areas.”
The Minister further explained that while private sector investment in the telecom industry remains crucial, the government is actively intervening to guarantee universal access to high-quality connectivity throughout Nigeria. The collaborative approach aims to bridge connectivity gaps and improve service quality nationwide.
Meanwhile, Airtel Africa says Nigeria is the soul of its operations in Africa, with the potential to match India’s advancements in digital innovation, connectivity, and financial inclusion. Chairman of Airtel Africa, Sunil Bharti Mittal, stated this after he led a delegation of members of the company to meet with President Bola Tinubu.
He noted that Airtel’s success in Nigeria is crucial to its overall success in Africa, stressing that the country’s strategic importance underscores the company’s objective, which is to drive growth and transformation across the continent.
“Nigeria is the most important part of our Africa strategy. In fact, the entire Africa rests on the back of Nigeria for Airtel. And Nigeria is important to us, personally important to me. I watch over one country other than India, personally myself. That is Nigeria. I come back here from time to time, and it’s in our intention to make Nigeria at par with what we are seeing in India in terms of digital innovation, digital connectivity and financial inclusion.”
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