States now to share payment of electricity subsidy

Yakubu spoke at the opening of the workshop of the 2026 Post-Budget Preparation Using Government Integrated Financial Management System (GIFMIS).

He disclosed that President Bola Tinubu gave the directive.

In an address read on his behalf by the Director of Expenditure Social, Yusuf Muhammed, he said: “Mr. President has directed that we operationalise a clearer framework to share the cost of electricity across the federation, so the burden is not treated as an open-ended fiscal residual.

“I mean federal residual.

“Let me be direct.

“If you want a stable power sector, we must pay for the choices we make.

“When tariffs are held low cost, a gap is created.

“That gap is a subsidy, and a subsidy is a bill.

“In 2026, we will stop pretending that this bill can be left to the Federal Government alone, especially where the policy choice or the political benefit is shared across tiers of government.

“Mr. President directed us to invoke the electricity sector legal framework to make burden-sharing practical and transparent.

“This means subsidy costs must be explicit, tracked and funded, so they do not return as arrears liquidity crisis or hidden liabilities in the market.

“It also means that if any tier of government chooses affordability intervention, the responsibility must be clear, agreed and enforceable.

“This is not punishment.

“It is an alignment.

“When everyone carries a fair share of the cost, everyone also has an incentive to support cost effective, efficiency- targeted protection for the vulnerable, and empower the market that can actually deliver for MDAs.

“The implication is simple: it makes subsidies-related costs visible in your planning and submission.

“Do not push liabilities into the market as arrears or unfunded commitment.

“Support transparent rule-based attribution and financing of affordability decisions.

“Fiscal rules are not a slogan, they are the guardrails of the government.

“Without guardrails, spending becomes impulsive, debt becomes casual, and the budget becomes a statement of intent, rather than a tool of delivery.

“But rules must also be smart.

“They must respond to volatility without collapsing under pressure.

“That is why the 2026 direction is not to abandon rules, but to modernise them, so they work in today’s Nigeria.

“Mr. President’s directive is to review the Fiscal Responsibility Framework to make it more dynamic and more enforceable.

“That means clearer fiscal anchors, better-defined escape clauses for genuine shocks, and a credible path back to compliance when those clauses are used.

“It means stronger reporting, tighter discipline around contingent liabilities, and a firmer link between the medium-term framework and annual appropriations.

‘’For MDAs, this changes the conversation.

“You will not only be asked what you want to spend.

“You will be asked how it fits the fiscal rules, how it affects sustainability, and what measurable results it will deliver.

“A long list of projects is not a development strategy. It is often a map of disappointment. What citizens feel is delivery —completed roads, reliable power, functional schools, working hospitals.

“So in 2026, we are moving decisively from naming projects to financing and delivering projects.

“This is where project financing becomes central. It is not a buzzword, it is a discipline.

“It means projects must be properly scoped, costed, sequenced and packaged to attract the right mix of funding—budget, PPPs, blended finance, guarantees, and counterpart resources where relevant.

“It means readiness: designs, approvals, procurement strategy, and an implementation time-table.

“It means bankability: a credible revenue or service-payment logic, risk allocation, and clear governance.

“It means prioritisation: fewer projects, better funded, better delivered.

“If we do this, the budget becomes a pipeline of completion, not a catalogue of unfinished work.

“That is the project-financing mindset Mr. President wants embedded across MDAs in 2026.”