State Governments to share Electricity subsidy burden — FG
The Federal Government has directed state governments to begin sharing the cost of electricity subsidies with the centre, ending the practice of the Federal Government bearing the burden alone.
The subsidy will now be funded through the Power Assistance Consumers Fund (PCAF), a government-backed pool designed to provide targeted support for low-income and vulnerable electricity consumers, rather than blanket subsidies.
The directive was disclosed in Abuja by the Director-General of the Budget Office of the Federation, Tanimu Yakubu, during the 2026 Post-Budget Preparation workshop. He said states that benefit politically from electricity subsidies must also contribute financially.
According to him, Bola Tinubu has ordered a clear and transparent framework for sharing subsidy costs across all tiers of government to prevent hidden liabilities and recurring liquidity crises in the power sector.
More than 18 states, including Lagos, Edo, Delta, Rivers, Anambra, Plateau and Jigawa, already operate electricity regulatory agencies, positioning them to participate in the cost-sharing arrangement.
Yakubu also revealed that the President has directed a review of Nigeria’s Fiscal Responsibility Framework to strengthen fiscal discipline, stressing that subsidy costs must be explicit, tracked and properly funded in government budgets.
The Nigerian Governors’ Forum said it is reviewing the policy and declined further comment for now.
