Subsidy Savings: Governors and Nigeria’s Power Problems (1)

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Edited by Oke Epia, E-mail: sostainability01@gmail.com  | WhatsApp: +234 8034000706

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The ongoing debate over fuel subsidy removal has invariably raised persistent accountability questions about trillions of naira supposedly saved since 2023, when the Bola Tinubu administration abruptly introduced the controversial policy. The federal government says N15.8 trillion was generated between June 2023 and December 2025 and that a significant proportion of this money went to the sub-nationals.  Official figures indicate the 36 state governors now receive up to N3 trillion in monthly allocation compared to a few hundred billion some years back. Questions over how these sums of money were spent have led to buck-passing and finger-pointing between the presidency and state governors. The former would want Nigerians to hold the latter accountable for the significant increase in monthly federal receipts. On the other hand, the governors say they should not be held to blame for the lack of sufficient evidence of how the subsidy savings have been used.

But while politicians and political parties weaponize the debate to their advantage, SOStainability has chosen to steer the conversation into the policy and governance arena. Specifically, the key concern of this article is about how the humongous sums of money have been spent or misspent towards a most essential item of life and living – energy that powers households, businesses and communities. To make for a more productive interrogation, the focus is further streamlined to efforts by the sub-nationals to provide power to the people they serve. (There is another day for what the federal government and specialised national institutions, including oversight bodies like the national assembly, have done in this regard. The series will also spotlight important contributions by the private sector, especially in renewable energy projects and initiatives. It will also highlight significant efforts and contributions of development partners to support energy access.) The stark question that arises is: what have the 36 state governors done to increase electricity generation, transmission, and distribution in their domains? Put in another way, what have they done to expand the net of electricity coverage and make the vital product more affordable to urban, semi-urban and rural areas?

This question would have been inchoate and misplaced before June 2023. But there was a major seismic shift in Nigeria’s power provision equation when electricity was moved from the exclusive to the concurrent legislative list in the 1999 Constitution. On June 8, 2023, President Tinubu signed the electricity bill into law, thereby decentralising the generation, transmission, and distribution of electricity from being a hitherto federal affair. This law also elevates renewable energy in the country’s efforts to solve the energy challenge while aiding the transition from fossil fuels. This landmark event permanently discarded the hitherto valid excuse given by states that they could not provide power to citizens because it was an exclusive domain of the central government. That legislation, which replaced the Electric Power Sector Reform Act of 2005, opened what should be a floodgate to energy access in a country where only 62.5 percent of the population (according to 2024 World Bank data) has electricity, albeit unstable, inefficient, and ineffective. The significant financial flows to the states due to the removal of fuel subsidy also serve as a counter to any excuse of lack of funds to embark on meaningful electricity projects by willing state governors. Thus, two key macro-economic policies initiated and sustained by the Tinubu government since 2023 provide the platform and incentive for states to tackle the perennial problem of electricity. That is, if they choose to.

To steer the subsidy savings debate further into the policy arena, SOStainability will serialise a peer-to-peer review of how the 36 states have engaged the 2023 Electricity Act to move the needle in the provision of power in their respective jurisdictions. This light-touch series forms the incipient foundations of the SDG7 success stories publication, which will potentially feed into a comprehensive and concise documentation purpose-fit for the global climate finance ecosystem. For context, the United Nations (UN) Sustainable Development Goal (SDG) 7 targets a 2030 timeline for the world to achieve affordable and clean energy for all. Given the current state of affairs regarding the SDGs generally, it is arguably more important to assess the readiness and positioning of states like Nigeria to work towards the lofty development aspirations than achieving them. This makes this series all the more consequential. In terms of the current political context and overall civic mobilisation, it provides an objective performance assessment of incumbent governors, especially those seeking reelection.

So what have Nigeria’s state governors done to power their states? This question will be answered in terms of legislation, policies, and regulations put in place to align with the 2023 Electricity Act. Answers will also be in terms of institutions, offices, and relevant bureaucracies set up to enable policy implementation. And then the answers will also be vis-à-vis the infrastructure and projects undertaken (or being undertaken). What is important at this stage is whether there has been any motion or movement that can measurably and reasonably contribute to increased access to electricity and efficient use of energy resources, including renewable energy (solar, wind, hydro, or thermal). This series builds on a previous piece published on this page about six months ago, titled, ‘Power to the states but where is the light?  It stated inter alia: “Policy is only as meaningful as its implementation. Under the (Electricity) Act, a state must pass its own electricity law, set up an electricity regulator, and then formally request NERC to transfer intrastate regulatory authority. Once that happens, the state regulator takes full control of intrastate licensing and enforcement. States that have taken the leap include Enugu, Ondo, Ekiti, Imo, Oyo, Edo, and Kogi. These states have passed enabling legislation, established regulators, and received transfer orders from NERC. The decentralization of power is historic. Whether it becomes transformative depends entirely on execution. Now the real test begins: which governors will truly light up their state? The states will be reviewed in no particular order.