Band A users help fund subsidies for other electricity consumers
A new report reveals that Nigeria’s electricity subsidy mostly benefits middle-income consumers in Bands B and C, rather than the poorest. Band A customers, who receive the most reliable power supply, actually pay tariffs above the cost of generation and end up subsidising lower bands. The report challenges assumptions about who benefits from government electricity support. It also highlights issues with uniform tariffs and inefficiencies across different distribution companies.
TLDR
- Band A consumers contributed an estimated N101bn to subsidise lower tariff bands, instead of receiving any subsidy.
- Bands B and C received about 70 per cent of the N1.93tn subsidy, with Band B getting N741bn and Band C N609bn.
- The report found that Bands D and E, despite higher gaps between tariffs and generation costs, consumed less electricity and received smaller portions of the subsidy.
- The Nigerian Electricity Regulatory Commission’s first-quarter 2026 data showed the government covered N358.32bn, or 51.95 per cent of total generation costs, through tariff support.
- The report recommends expanding transmission and distribution capacity, improving gas supply, and adopting performance-based regulation to address inefficiencies.
