President Bola Tinubu has directed all ministries, departments and agencies (MDAs) to rely on existing electricity sector laws to clearly define how power subsidy costs are shared among the federal, state and local governments in the 2026 budget.
Tanimu Yakubu, director-general (DG) of the budget office of
the federation, announced the directive on Monday during a keynote address at
the opening of a training programme for MDAs on the 2026 post-budget
preparation process in Abuja.
Yakubu said the president wants electricity subsidy costs to
be explicit, practical and transparent, warning that no level of government
should carry hidden or unpaid obligations.
“Subsidy costs must be explicit, tracked and funded, so they
do not return as arrears, liquidity crises or hidden liabilities in the power
market,” he said.
He said whenever any tier of government chooses to keep
electricity tariffs below cost, the financial responsibility for that decision
must be clearly agreed and enforced.
“If any tier of government chooses affordability
interventions, the funding responsibilities must be clear, agreed and
enforceable. This is not punishment. It is alignment,” Yakubu said.
The DG further said a fair sharing of subsidy costs will
improve performance in the power sector and strengthen support for protecting
vulnerable consumers.
“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 said.
Yakubu told MDAs to fully disclose all subsidy-related costs
in their budget proposals and stop pushing unpaid obligations into the power
market, where they later emerge as debts that hurt electricity companies and
consumers.
‘ONLY PROJECTS READY FOR IMPLEMENTATION WILL BE CONSIDERED IN 2026 BUDGET ‘
The DG said the federal government is changing how projects are treated in the 2026 budget, stressing that only projects ready for implementation and financing will be considered.
“If it cannot be implemented, it should not be proposed. If
it cannot be measured, it should not be defended,” he said.
Yakubu warned that long lists of poorly funded projects
often lead to disappointment for citizens.
“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 and working hospitals,” he said.
The DG said MDAs must now demonstrate that projects are
properly planned, costed and linked to clear funding sources, whether through
the federal budget, private sector partnerships or other financing
arrangements.
Yakubu also announced that Tinubu has directed a review of
the fiscal responsibility framework to strengthen spending discipline and align
it with current economic realities.
“Fiscal rules are not a slogan. They are the guardrails of
government. Without guardrails, spending becomes impulsive, debt becomes
casual, and the budget becomes a statement of intent rather than a tool of
delivery,” he said.
The DG added that under the new approach, MDAs will be
required to show how their spending plans align with fiscal rules,
sustainability goals and measurable outcomes.
Yakubu also said that electricity subsidies can no longer be treated as the sole responsibility of the federal government.
“If we want a stable power sector, we must pay for the
choices we make. When tariffs are held below cost, a gap is created. That gap
is a subsidy. And a subsidy is a bill,” he said.
The DG said all 2026 budget proposals will be assessed to
ensure they align with national priorities, are deliverable, provide value for
money and stay within Nigeria’s fiscal limits.
According to Yakubu, the goal is to ensure the 2026 budget
focuses on completing projects and solving real problems, rather than expanding
lists of plans that are never fully delivered.
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