Olushola Omogbehin
The Federal Government has decided to end the era of bearing the burden of electricity subsidy alone but henceforth share it with States and local governments
Director-General of the Budget Office of the Federation, Tanimu Yakubu, announced the plan to share the subsidy cost during a meeting with Ministries, Departments, and Agencies (MDAs) on the 2026 Budget.
He said President Bola Ahmed Tinubu wants to ensure that the heavy bill for electricity subsidies is not left for the Federal Government alone to carry.
Using the Government Integrated Financial Management Information System Budget Preparation Sub-System, Yakubu said President Bola Tinubu had directed that electricity subsidy costs be made explicit, tracked, and fairly shared across tiers of government, warning that the current approach creates hidden liabilities and recurring crises in the power market.
“If we want a stable power sector, we must pay for the choices we make,” he said. “When tariffs are held below cost, a gap is created. That gap is a subsidy. And a subsidy is a bill.
“In 2026, we will stop pretending that this bill can be left to the Federal Government alone, especially where the policy choice or the political benefit is shared across tiers of government.
“This means subsidy costs must be explicit, tracked, and funded, so they do not return as arrears, liquidity crises, or hidden liabilities in the market,” he said. “If any tier of government chooses affordability interventions, the funding responsibilities must be clear, agreed, and enforceable.
“This is not punishment. It is alignment,” he said. “When everyone carries a fair share of the cost, everyone also has an incentive to support cost-reflective efficiency, targeted protection for the vulnerable, and a power market that can actually deliver.”
He told MDAs that they must now clearly show all subsidy-related costs in their budget plans and avoid pushing unpaid obligations into the power market as debts that later create problems for electricity companies and consumers.
Yakubu said the 2026 Budget marked a clear break from rollover budgeting and fragmented project lists, which he said had weakened execution and accountability over the years.
“The 2026 Budget corrects this. It is built as one coherent implementation framework,” he said. “The approach is to consolidate commitments into a single, visible pipeline and manage them as a disciplined programme of delivery.”
Listing many projects without proper funding and planning will leads to disappointment for citizens who expect real results on the ground.
“A long list of projects is not a development strategy. It is often a map of disappointment. What citizens feel is delivery – completed roads, reliable power, functional schools, working hospitals,” the Budget Office chief said.
