The Federal Government has announced plans to introduce an annual electricity subsidy of $600m for all customers from 2025 as part of efforts to reform the power sector.

The subsidy, expected to last until 2027, aims to bridge the gap between cost-reflective tariffs and regulated electricity rates, while the government works towards eliminating the metering deficit and enhancing the financial sustainability of power distribution companies.

According to Nigeria’s Energy Compact document obtained by Sunday PUNCH, the initiative is part of the National Energy Compact and aligns with Nigeria’s broader electrification and clean energy transition plans.

Nigeria, alongside Côte d’Ivoire, Zambia, and nine other African countries, presented its energy compact at a two-day summit in Tanzania, with a focused on innovative energy solutions.

However, the policy is a temporary measure designed to ensure affordability while the government progressively moves towards full cost-reflective tariffs.

The document noted that the subsidy might take different forms, including a flat monthly subsidy per electricity consumer or a subsidy on the first 50 kilowatt-hours consumed each month.

This approach intends to reduce the regressivity of previous subsidies, where a significant portion benefited wealthier households.

By 2027, the government plans to introduce a social tariff to protect low-income and vulnerable customers once the broader cost-reflective framework is fully implemented.

The document noted the Federal Government’s trajectory to full cost-reflectivity included a “$600m per year subsidy in 2025 to 2027 (while metering gap is being closed), and then fully CRT except for social tariff for vulnerable customers.”

It added, “In order to decrease the regressivity of electricity subsidies, move towards a full cost reflective tariff system which includes a limited and uniform subsidy for all customers in 2025 while the metering gap is being closed. This scheme can take the form of a uniform monthly subsidy per customer, or the first 50 kWh per month being subsidised.”

A key focus of the reform is closing Nigeria’s metering gap, which currently stands at approximately seven million unmetered electricity end-users.

The government outlined a plan to install 1.5 million smart meters in 2025, four million in 2026, and 1.5 million in 2027.

The closure of the metering gap is expected to minimise losses in the sector, improve revenue collection efficiency, and ensure that tariffs are aligned with actual consumption, thereby reducing the need for future subsidies.

The electricity sector has struggled with financial sustainability due to high technical and commercial losses, low tariff recovery rates, and liquidity constraints.

Despite efforts under the Power Sector Recovery Programme, tariff shortfalls reached N650bn in 2023 and are expected to rise further in 2024, potentially exceeding N2.2tn.

The subsidy scheme would provide temporary relief while ensuring that distribution companies meet their financial obligations to power generation companies and the Transmission Company of Nigeria.

A family of three has been killed by suspected terrorists at Lighitlubang village, Mangu Local Government Area of Plateau State.

The husband, wife, and their child were attacked by the terrorists while they were asleep on Friday night.

Sunday PUNCH also gathered that another husband and wife were killed by the assailants.

One of the villagers, Moses Bankat, confirmed the incident to our correspondent.

He said, “It happened at about midnight on 31/01/2025. Some suspected Fulani terrorists entered Lighitlubang village in Bungha District of Mangu Local Government and killed a family of five—a man, his wife, and child—along with another man and his wife, all slaughtered.”

It was learnt that the attack has sent shockwaves through the community, with many residents expressing fear and anxiety.

The incident is the latest in a series of attacks blamed on terrorists in the region.

The spokesman for the Plateau State Police Command, Alabo Alfred said security agents had been deployed to the affected community to maintain peace and order while an investigation had begun.

“I will get details from the DPO when they return from the bush because they have gone there,” the PPRO said.

The black market (parallel market) exchange rate for the US Dollar (USD) to Nigerian Naira (NGN) on Saturday, February 1, 2025 is as follows:

Buying Rate: ₦1630
Selling Rate: ₦1640
This rate is based on transactions at the Lagos Parallel Market (Black Market), according to sources from Bureau De Change (BDC) operators.

Central Bank of Nigeria (CBN) Official Rate
While the black market rate is widely used, it is important to note that the Central Bank of Nigeria (CBN) does not recognize the parallel market and encourages individuals to obtain foreign exchange through their respective banks. The official rates for the CBN are:

Highest Rate: ₦1517
Lowest Rate: ₦1490
Important Note
Please note that actual buying or selling rates may vary slightly depending on the location and the Bureau De Change you are dealing with. The rates shared here are an average estimate based on recent observations.