President Bola Ahmed Tinubu has directed all Ministries, Departments, and Agencies (MDAs) to rely on existing electricity sector laws to ensure that power subsidy costs are clearly defined, transparent, and fairly shared among the Federal, State, and Local Governments in the 2026 budget process.
The directive was disclosed by the Director-General of the Budget Office of the Federation, Dr. Tanimu Yakubu, during a keynote address at the opening of a training programme for MDAs on post-budget preparation for the 2026 fiscal year in Abuja.
Yakubu said the President is determined to prevent hidden or unpaid electricity subsidy obligations that often return as arrears, liquidity challenges, or unpaid liabilities within the power sector.
“Subsidy costs must be explicit, tracked, and fully funded so they do not re-emerge as debts that destabilise the electricity market,” he said.
He explained that whenever any tier of government chooses to intervene in electricity pricing to make power affordable, the financial responsibility for such decisions must be clearly agreed upon and enforced.
“If any level of government opts for affordability interventions, the funding responsibilities must be clear, agreed, and enforceable. This is not punishment; it is alignment,” Yakubu stated.
According to him, fair cost-sharing will promote efficiency in the power sector, encourage cost-reflective pricing, and ensure better protection for vulnerable consumers.
Yakubu stressed that MDAs must now explicitly capture all subsidy-related obligations in their budget proposals and avoid transferring unpaid costs to electricity market operators, a practice that has previously created instability for power companies and consumers.
Beyond power subsidies, he said the Federal Government is introducing stricter standards for including projects in the 2026 budget. He noted that only projects that are ready for implementation and, where necessary, prepared to attract financing will be considered.
“If a project cannot be implemented, it should not be proposed. If it cannot be measured, it should not be defended,” he said.
He warned that overcrowding the budget with poorly planned projects often results in limited delivery and public disappointment.
“A long list of projects is not a development strategy. What citizens feel is delivery—completed roads, reliable electricity, functional schools, and working hospitals,” Yakubu said.
He explained that the government is now prioritising proper project financing, requiring MDAs to present clear designs, approvals, procurement plans, timelines, and funding sources, whether through budgetary allocations, private sector partnerships, or other financing arrangements.
On fiscal discipline, Yakubu disclosed that President Tinubu has ordered a review of the Fiscal Responsibility framework to strengthen spending controls and align them with current economic realities.
“Fiscal rules are the guardrails of government. Without them, spending becomes impulsive, debt becomes casual, and budgets lose their power to deliver results,” he said.
He added that MDAs will now be required to justify spending requests based on fiscal sustainability, national priorities, and measurable outcomes, while also disclosing future financial risks.
Yakubu reiterated that electricity subsidies can no longer be treated as the sole responsibility of the Federal Government.
“When tariffs are held below cost, a gap is created. That gap is a subsidy—and a subsidy is a bill that must be paid,” he said.
He concluded that all 2026 budget proposals will be rigorously assessed to ensure they align with national priorities, are achievable, deliver value for money, and remain within the country’s fiscal limits.
According to him, the overarching goal of the 2026 budget is to complete projects and address real challenges facing Nigerians, rather than produce long lists of initiatives that are never fully delivered.
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