President Bola Ahmed Tinubu has directed all Ministries, Departments, and Agencies (MDAs) to use existing electricity sector laws to make the sharing of power subsidy costs among the Federal, State, and Local Governments clear, practical, and open in the 2026 budget process.
This was disclosed by the Director-General of the Budget Office of the Federation, Dr. Tanimu Yakubu, during a keynote address at the start of a training programme for MDAs on the 2026 post-budget preparation using the Government Integrated Financial Management Information System and the Budget Preparation System in Abuja on Monday.
Yakubu said the President wants the burden of electricity subsidies to be clearly shared so that no level of government is left carrying hidden or unpaid costs.
“Subsidy costs must be explicit, tracked and funded, so they do not return as arrears, liquidity crises or hidden liabilities in the power market,” he said.
He explained that when any level of government decides to keep electricity prices low for citizens, the financial responsibility for that decision must be clearly agreed upon and enforced.
“It also means that if any tier of government chooses affordability interventions, the funding responsibilities must be clear, agreed, and enforceable. This is not punishment. It is alignment,” Yakubu said.
According to him, fair sharing of the burden will encourage better performance in the power sector and stronger support for protecting vulnerable consumers.
“When everyone carries a fair share of the cost, everyone also has an incentive to support cost-reflective efficiency, targeted protection for the vulnerable, and a power market that can actually deliver,” he said.
Yakubu told MDAs that they must now clearly show all subsidy-related costs in their budget plans and avoid pushing unpaid obligations into the power market as debts that later create problems for electricity companies and consumers.
Beyond power subsidies, he said, the Federal Government is changing how projects are treated in the 2026 budget. He noted that projects must be ready to be delivered and, where needed, ready to attract financing before they are included in the budget.
“If it cannot be implemented, it should not be proposed. If it cannot be measured, it should not be defended,” he said.
He warned that listing many projects without proper funding and planning often leads to disappointment for citizens who expect real results on the ground.
“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,” Yakubu said.
He explained that the government is now focusing on proper project financing, which means that every project must be carefully planned, cost, and matched with a clear source of funding, whether from the federal budget, partnerships with the private sector, or other financial arrangements.
Yakubu said MDAs must show that their projects are ready, with designs, approvals, procurement plans, and clear timelines, as well as explain how each project will be funded and what results Nigerians should expect.
On government spending rules, he disclosed that President Tinubu has directed a review of the Fiscal Responsibility framework to make it stronger and better suited to current economic conditions.
“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,” he said.
He explained that the review will lead to clearer limits on spending, stronger reporting, better control of future financial risks, and a closer link between long-term planning and yearly budgets.
“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,” Yakubu said.
He urged MDAs to build their proposals around available funds, clearly explain their priorities, and disclose any risks, especially future costs that could fall on the government.
Yakubu also stressed again that the cost of electricity subsidies can no longer be treated as the responsibility of the Federal Government alone.
“Let me be direct. If we want a stable power sector, we must pay for the choices we make. When tariffs are held below cost, a gap is created. That gap is a subsidy. And a subsidy is a bill,” he said.
He added that when the benefits of such decisions are shared across different levels of government, the costs must also be shared in a clear and agreed way.
As part of the 2026 budget process, Yakubu said all MDA proposals will be tested to ensure they match national priorities, can be carried out, offer value for money, and respect the country’s financial limits.
He said the overall goal is to make the 2026 budget focus on completing projects and solving real problems for Nigerians, rather than creating long lists of plans that are never fully delivered.
