Nigeria recorded the lowest average electricity tariff among 14 selected African nations in 2025, according to data from the Nigerian Electricity Regulatory Commission (NERC).
The regulator reported that the average allowed end-user tariff in the country stood at N124.30 per kilowatt-hour (kWh) during the period.
This finding places Nigeria at the bottom of the pricing scale when compared to the other 13 African countries tracked in the commission’s analysis.
The data emerges as the federal government continues to navigate the complex transition toward a cost-reflective tariff regime, aimed at reducing the financial burden on the state and attracting private investment into the power sector.
For years, the Nigerian Electricity Supply Industry (NESI) has struggled with a liquidity crisis driven by a significant gap between the cost of producing electricity and the tariffs charged to consumers.
While low tariffs may appear beneficial for end-users, industry analysts argue that under-priced power often leads to under-investment in critical infrastructure and unstable supply.
Financial Sustainability and Infrastructure Investment
The discrepancy between cost and pricing has historically forced the government to provide subsidies to bridge the gap, often creating a cycle of debt within the value chain.
Distribution companies (DisCos) have frequently cited these low tariffs as a primary reason for their inability to maintain networks or upgrade transformers, which in turn increases technical and commercial losses.
To address these systemic issues, NERC has implemented a Multi-Year Tariff Order (MYTO) framework. This framework is designed to ensure that tariffs are reviewed periodically to reflect actual operating costs and inflation.
The shift toward cost-reflective pricing is a core recommendation of the World Bank, which has provided technical and financial support for the Nigeria Electricity Supply Industry Performance Program.
The goal is to move away from blanket subsidies and toward targeted support for vulnerable consumers, allowing the rest of the market to pay prices that sustain the grid.
The 2025 figures suggest that despite various tariff hikes implemented over the previous two years, Nigeria’s power remains relatively inexpensive compared to its continental peers.
However, the reliability of this cheap power remains a point of contention. Many industrial users and SMEs continue to rely on expensive diesel and petrol generators to supplement unstable grid electricity, effectively raising their actual cost of energy far above the NERC-allowed tariff.
This reliance on self-generation undermines the competitiveness of Nigerian manufacturing and increases the operational overhead for businesses across the country.
The current pricing structure also impacts the ability of Generation companies (GenCos) to recover costs and invest in new capacity, which is essential for meeting the growing demand of a rising population.
NERC is expected to continue monitoring these trends as it balances the need for social affordability with the necessity of financial viability for the power sector.
The regulator’s next phase of tariff adjustments will likely focus on further refining the band-based system, where customers with better supply reliability pay higher rates than those with poor service.
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