Friday 17 April, 2026

The federal government paid ₦418.79 billion in electricity subsidies in one quarter. The grid still averaged below 5,400 megawatts for 250 million people.

The Nigerian Electricity Regulatory Commission released its Q4 2025 quarterly report this week. It contains one number that explains most of what Nigerians experience when they flip a switch.

The federal government covered 52.3% of the total invoice issued by power generation companies in the last quarter of last year. That came to ₦418.79 billion in a single quarter. The grid that spending supported delivered below 5,400 megawatts to a country of 250 million people. That is roughly 22 watts per person at peak.

The subsidy is not going to the consumer. It covers the gap between what electricity actually costs to produce and what the regulated tariff allows distribution companies to charge. The government pays the difference. The DisCos collect what they can from customers. Nigerians run generators for the rest.

What makes this figure instructive is the efficiency data beneath it. DisCos received 7,991 gigawatt-hours and billed customers for only 6,614. Nearly 1,400 gigawatt-hours were lost in distribution before anyone paid for them. The government is subsidising a system that loses money at generation, loses power in distribution, and still cannot keep the lights on.

An economist quoted in the ICIR this week said that in 2024 alone Nigeria spent ₦2.8 trillion on power subsidies, while generation companies are carrying debt above ₦6 trillion. The subsidy is not filling a gap. It is underwriting a structure that compounds its own losses every quarter.

Nigeria has subsidised electricity for decades. The pattern is consistent. Tariffs are kept below cost-reflective levels because raising them is politically difficult. The gap is covered by government transfer to generation companies. The distribution companies collect what they can and lose the rest. The consumer gets a grid that averages 22 watts per person. The subsidy doesn't fix this. It makes it stable enough to continue.

What a cost-reflective tariff reform would do is shift that burden from the government to the consumer. The reason it hasn't happened fully is that most Nigerian households can't absorb the price of electricity their consumption actually costs. Band A customers, who pay the closest to cost-reflective rates, are a minority of the market. Everyone else is on a subsidised rate the government can't afford and won't remove.

You know this already. You know it from the generator noise. You know it from the fuel costs running through everything you buy. The ₦418.79 billion puts a quarterly figure on what you have been covering in parallel costs since the grid last worked properly.