Nigeria Plans Significant Electricity Tariff Increase to Boost Investments

The Nigerian government is set to implement a significant electricity tariff increase of about two-thirds, aimed at reflecting the actual cost of power supply and attracting private investment in the sector. Olu Verheijen, Special Adviser to President Bola Tinubu on Energy, emphasized the necessity of a cost-efficient yet cost-reflective tariff system to ensure the sector's financial viability while protecting low-income households through targeted subsidies. This tariff adjustment follows a previous hike that saw rates tripled for some consumers last year and comes amid ongoing economic challenges for many Nigerians. The government is pursuing this strategy amidst chronic issues, including frequent power outages and an unreliable grid, which limit productivity. Verheijen indicated that the tariff hikes are part of a broader $32 billion plan to improve electricity access by 2030, with contributions expected from both private investors and public sources. Critics remain skeptical, citing the need for consistent power supply and the ongoing difficulties faced by electricity distribution companies.