Tinubu directs MDAs to disclose electricity subsidy costs in 2026 budget

President Bola Tinubu has directed all ministries,departments and agencies (MDAs) to rely on existing electricity sector laws toclearly define how power subsidy costs are shared among the federal, state andlocal governments in the 2026 budget. Tanimu Yakubu, director-general (DG) of the budget office ofthe federation, announced the directive on Monday during a keynote address atthe opening of a training programme for MDAs on the 2026 post-budgetpreparation process in Abuja. Yakubu said the president wants electricity subsidy costs tobe explicit, practical and transparent, warning that no level of governmentshould carry hidden or unpaid obligations. “Subsidy costs must be explicit, tracked and funded, so theydo not return as arrears, liquidity crises or hidden liabilities in the powermarket,” he said. He said whenever any tier of government chooses to keepelectricity tariffs below cost, the financial responsibility for that decisionmust be clearly agreed and enforced. “If any tier of government chooses affordabilityinterventions, the funding responsibilities must be clear, agreed andenforceable. This is not punishment. It is alignment,” Yakubu said. The DG further said a fair sharing of subsidy costs willimprove performance in the power sector and strengthen support for protectingvulnerable consumers. “When everyone carries a fair share of the cost, everyonealso has an incentive to support cost-reflective efficiency, targetedprotection for the vulnerable, and a power market that can actually deliver,”he said. Yakubu told MDAs to fully disclose all subsidy-related costsin their budget proposals and stop pushing unpaid obligations into the powermarket, where they later emerge as debts that hurt electricity companies andconsumers. ‘ONLY PROJECTS READY FOR IMPLEMENTATION WILL BE CONSIDEREDIN 2026 BUDGET ‘ The DG said the federal government is changing how projectsare treated in the 2026 budget, stressing that only projects ready forimplementation and financing will be considered. “If it cannot be implemented, it should not be proposed. Ifit cannot be measured, it should not be defended,” he said. Yakubu warned that long lists of poorly funded projectsoften lead to disappointment for citizens. “A long list of projects is not a development strategy. Itis often a map of disappointment. What citizens feel is delivery completedroads, reliable power, functional schools and working hospitals,” he said. The DG said MDAs must now demonstrate that projects areproperly planned, costed and linked to clear funding sources, whether throughthe federal budget, private sector partnerships or other financingarrangements. Yakubu also announced that Tinubu has directed a review ofthe fiscal responsibility framework to strengthen spending discipline and alignit with current economic realities. “Fiscal rules are not a slogan. They are the guardrails ofgovernment. Without guardrails, spending becomes impulsive, debt becomescasual, and the budget becomes a statement of intent rather than a tool ofdelivery,” he said. The DG added that under the new approach, MDAs will berequired to show how their spending plans align with fiscal rules,sustainability goals and measurable outcomes. Yakubu also said that electricity subsidies can no longer betreated as the sole responsibility of the federal government. “If we want a stable power sector, we must pay for thechoices we make. When tariffs are held below cost, a gap is created. That gapis a subsidy. And a subsidy is a bill,” he said. The DG said all 2026 budget proposals will be assessed toensure they align with national priorities, are deliverable, provide value formoney and stay within Nigeria’s fiscal limits. According to Yakubu, the goal is to ensure the 2026 budgetfocuses on completing projects and solving real problems, rather than expandinglists of plans that are never fully delivered.

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