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The administration of Nigerian Bola Ahmed Tinubu has announced plans to remove electricity subsidies, which could result in price increases and economic hardship for millions of Nigerians.
Power Minister Adebayo Adelabu stated that the government can no longer afford to subsidize the power sector and must shift to a more cost-effective pricing strategy. This follows the recent elimination of fuel subsidies, which has already caused financial hardship for many citizens.
Nigeria currently spends approximately N3 trillion per year subsidizing electricity costs. The country also owes N1.3 trillion to power generation companies and $1.3 billion to natural gas suppliers, which far exceeds the N450 billion budgeted for electricity subsidies in 2024. According to experts, the actual subsidy could reach N2.9 trillion this year.
The administration cannot continue to provide subsidies due to the excessive debts that plague the electricity sector. As a result of the new pricing scheme, consumers' electricity bills are likely to increase, potentially worsening economic conditions.
Critics claim that the government failed to take steps to protect low-income families from the impact of rising utility costs. They argue that the removal of subsidies will disproportionately harm the poor and middle class. Supporters argue that sector deficits and inefficiencies must be addressed.
The opposition contends that the administration should have pursued reforms such as combating corruption and improving infrastructure before withdrawing financial aid. They argue that the government must now implement strong social welfare policies to help the most vulnerable communities affected by rising prices.
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