Nigeria's electricity crisis worsens as Federal Government pays just 4% of electricity subsidy budget 

Nigeria’s electricity crisis may worsen after new data gathered from the quarterly analysis by the Nigerian Electricity Regulatory Commission (NERC) showed subsidy duties of ₦536.40 billion in the first quarter of 2025, ₦514.36 billion in the second quarter, ₦458.76 billion in the third quater and ₦418.79 billion in the fourth quarter.

The regulator further expressed that the subsidy requirement for January 2026 alone is at ₦126.48 billion.

Yet the Federal Government paid only a small portion of its electricity subsidy, leaving a significant funding gap in the sector.

Although the government budgeted ₦958 billion for electricity subsidies, it released just ₦ 76.95 billion, which is about 4% of the estimated ₦1.9 trillion needed. 

This has created an outstanding debt of about ₦1.85 trillion across the power sector.

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The funding gap is putting serious pressure on companies in the power sector. Electricity generation companies (GenCos) are struggling to pay gas suppliers, which affects how much power they can produce. When power generation drops, Nigerians experience more blackouts.

According to reports, experts say this is one of the reasons electricity supply has remained unstable across the country. They also linked the crisis to the underfunding of the Nigerian Bulk Electricity Trading Plc (NBET).

Nigeria’s power sector has faced challenges for years, including low electricity tariffs, poor revenue collection and heavy reliance on government support.

Because electricity tariffs are not fully cost-reflective, the government has to cover part of the cost through subsidies.

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With about ₦1.85 trillion unpaid, experts warn that the situation could get worse if nothing changes.

They say the government needs to either fully pay the subsidy or allow electricity tariffs to reflect real costs.

Without this, the cycle of debt and poor power supply is likely to continue. The electricity funding gap is not enough to keep the system running smoothly. And as the gap grows, so does the risk of more power outages across the country.