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🇳🇬 Nigeria /Economy & Trade

Band A Power Users Subsidized Others with N101bn, Report Claims

From The Punch · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

News Documents & data Context piece
  • A report indicates that Nigeria's electricity subsidy disproportionately benefits middle-income consumers, with Bands B and C receiving about 70% of the N1.93tn subsidy in 2025.
  • Consumers in Band A, who receive at least 20 hours of electricity daily, paid tariffs slightly above cost, effectively contributing N101bn to subsidize lower bands.
  • This finding challenges the notion that subsidies primarily support the poorest consumers, as higher-paying bands are subsidizing lower ones.

Nigeria's electricity subsidy program appears to be channeling the majority of its benefits to middle-income consumers, according to a new report. In 2025, Bands B and C collectively received approximately 70% of the N1.93 trillion subsidy paid out, challenging the common assumption that these subsidies primarily aid the poorest segments of the population.

Band A pays just above cost, so it receives no subsidy; it contributes N101bn that offsets the rest.

— ZKJ Energy Partner Limited reportExplaining how Band A consumers contribute to subsidizing other electricity tariff bands.

The report by ZKJ Energy Partner Limited reveals a surprising dynamic: consumers in Band A, the highest service category guaranteed a minimum of 20 hours of electricity supply daily, are effectively subsidizing other bands. These consumers pay tariffs slightly above the estimated cost of their power supply. Consequently, Band A did not receive any portion of the Federal Government's subsidy. Instead, it generated an estimated surplus of N101 billion.

This surplus from Band A consumers played a crucial role in offsetting the costs associated with subsidizing customers in lower tariff bands (B, C, D, and E). The report states that Band A "pays just above cost, so it receives no subsidy; it contributes N101bn that offsets the rest." This means that while the subsidy is intended as a government intervention to shield consumers from cost-reflective electricity prices, a portion of the support for lower service bands is financed by higher tariffs paid by Band A customers.

Band A receives nothing; it pays just above cost and effectively returns N101bn, trimming the gross N2.03tn subsidy to the N1.93tn net figure.

— ZKJ Energy Partner Limited reportDetailing the financial contribution of Band A consumers to the overall electricity subsidy.

The analysis indicates that without Band A's contribution, the gross subsidy requirement would have been around N2.03 trillion. Band A's contribution reduced this net requirement to approximately N1.93 trillion. Band B emerged as the largest single beneficiary, receiving N741 billion (38% of the total subsidy), followed closely by Band C, which received N609 billion (32%). Bands D and E received N452 billion (24%) and N227 billion (12%), respectively. The report highlights that Band A is the only category that did not receive a subsidy because its tariff exceeded the estimated generation cost.

Band B is the single largest beneficiary, N741bn (38 per cent of the total), followed by Band C at N609bn (32 per cent). Together the two mid-bands take 70 per cent.

— ZKJ Energy Partner Limited reportQuantifying the subsidy amounts received by middle-income electricity consumers.
About this summary

Originally published by The Punch in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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