Abuja: Mr. Ewah Eleri, the Executive Director of the International Centre for Energy, Environment and Development (ICEED), has highlighted that the current electricity subsidy regime in Nigeria disproportionately benefits wealthier households over low-income communities. Mr. Eleri made these remarks during an interview with News Agency of Nigeria (NAN).
According to News Agency of Nigeria, Mr. Eleri revealed that the Federal Government had spent over 10 billion dollars on electricity subsidies in the past year, yet the benefits have predominantly gone to high-income households. He further elaborated that 10 percent of households received more than half of the government’s electricity subsidy, estimated at about ?3 trillion, while 40 percent benefited only marginally.
“Subsidies are intended to support vulnerable communities and make electricity affordable, but the current framework largely benefits those who consume the most electricity,” Eleri stated. He criticized the existing subsidy structure for discou
raging investment in renewable energies by making conventional electricity sources, like gas-fired generation, artificially cheaper than cleaner alternatives such as solar power.
As a consequence, renewable energy becomes less competitive, limiting the diversification of Nigeria’s energy mix and making it more challenging to meet climate change commitments. Eleri advocated for reforms in the electricity sector to deliver environmental and economic benefits while improving fairness in electricity pricing.
“We need to remove harmful subsidies that ultimately hurt the poor, constrain electricity expansion, and discourage investment in renewable energy. Whichever way you look at it, the current system leaves everyone worse off,” he emphasized.
Eleri also discussed the role of regulators, highlighting the opportunities created by the Electricity Act that empowers state governments to regulate electricity supply within their jurisdictions. He noted that around 15 states had already established functional electri
city regulatory commissions to oversee electricity markets, expand access, resolve consumer complaints, and manage disputes within the sector.
The success of the new framework, according to Eleri, would depend on clear regulatory boundaries between the Nigerian Electricity Regulatory Commission (NERC) and state electricity regulatory commissions. He stressed the importance of a clear understanding of the respective responsibilities of national and state regulators to ensure an efficient and effective electricity market.
Eleri expressed optimism that with well-coordinated reforms, Nigeria can improve access to electricity, promote cleaner energy, reduce inequality, and strengthen the performance of the power sector.