President Bola Tinubu Issues Directive On Electricity Subsidy Allocation For 2026 Budget.
Budget Office DG Announces Presidential Directive To Clarify Federal, State, And Local Government Roles In Electricity Subsidy Allocation
By Wapcodehub9ja LIVE News Correspondent Reporting Live From Abuja, Federal Capital Territory
President Bola Ahmed Tinubu has directed all ministries, departments, and agencies (MDAs) across the country to rely strictly on existing electricity sector laws when preparing the 2026 budget. The directive seeks to ensure that power subsidy costs are clearly defined and fairly shared among the federal, state, and local governments.
Tanimu Yakubu, Director-General (DG) of the Budget Office of the Federation, announced the directive today, explaining that the move is aimed at improving transparency, accountability, and efficiency in electricity sector funding. According to Yakubu, the presidential instruction will guide MDAs in aligning budgetary allocations with statutory provisions governing electricity subsidies.
Under the directive, all government agencies are expected to clearly outline how power subsidies are financed, how costs are allocated across different levels of government, and how expenditure will be monitored to prevent mismanagement. Analysts say this step could reduce disputes among federal, state, and local authorities over subsidy funding.
Experts in energy and public finance note that the directive is consistent with ongoing reforms in Nigeria’s electricity sector, which aim to reduce fiscal burdens, enhance efficiency, and support sustainable power supply. Clear rules on subsidy allocation are expected to strengthen accountability in the budgeting process.
The DG of the Budget Office emphasized that the directive aligns with President Tinubu’s broader economic policy, which prioritizes fiscal prudence and effective management of government resources. Officials are expected to submit detailed reports indicating how the subsidy costs will be divided, in compliance with existing laws.
Observers believe that this move could also improve investor confidence in Nigeria’s power sector by showing a commitment to legal compliance, transparency, and predictability in government spending. Properly defining subsidy responsibilities among governments could reduce delays and inefficiencies in electricity funding.
The Budget Office has indicated that it will provide guidance and templates to MDAs to ensure consistent reporting and adherence to the law. This is part of an ongoing effort to strengthen budget monitoring and reduce wasteful expenditure on electricity subsidies.
Energy sector stakeholders have welcomed the directive, noting that clarity in subsidy allocation is crucial for the long-term sustainability of power supply. They argue that it could also create space for private sector investment in electricity generation and distribution, as uncertainties over government funding are reduced.
President Tinubu’s directive is expected to be implemented immediately, with the 2026 budget serving as a pilot for clear, law-driven subsidy allocation. The outcome could set a precedent for future budgeting processes, reinforcing legal compliance and intergovernmental collaboration in Nigeria’s energy sector.
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