In a revealing disclosure that underscores the complexities of Nigeria’s electricity sector, the Federal Government has announced that some rural communities across the country are paying significantly higher electricity tariffs than urban consumers classified under Band A, despite enjoying more reliable power supply in many cases. This statement was made by Abba Aliyu, the Managing Director of the Rural Electrification Agency (REA), during an appearance on Channels Television’s The Morning Brief programme on Monday, August 25, 2025. Aliyu’s remarks shed light on the disparities in electricity pricing between rural and urban areas, the challenges of infrastructure deployment, and the transformative role of solar-powered mini-grids in addressing Nigeria’s longstanding energy crisis.
The revelation comes at a time when Nigeria continues to grapple with chronic energy supply issues that have stifled economic productivity, hindered development, and placed significant burdens on households and businesses. Despite efforts to privatize the power sector, challenges such as policy inconsistencies, inadequate investments, and operational inefficiencies have persisted, leaving millions without reliable access to electricity. The REA’s efforts to electrify rural communities through innovative solutions like solar mini-grids offer a glimmer of hope, but the high tariffs faced by some rural consumers highlight the need for more equitable and sustainable approaches to energy access.
Rural Tariffs Exceed Urban Band A Rates
During his appearance on The Morning Brief, Abba Aliyu provided a candid assessment of the electricity tariff structure in rural Nigeria, revealing that some communities are paying tariffs as high as N250 to N280 per kilowatt-hour, far exceeding the rates charged to urban Band A consumers. Band A customers, who typically enjoy at least 20 hours of electricity supply daily, were subject to a tariff increase approved by the Nigerian Electricity Regulatory Commission (NERC) in 2024, which raised their rates from N66 per kilowatt-hour to N225. The fact that rural communities, often located in remote and underserved areas, are paying even higher rates than this benchmark has sparked concerns about equity and affordability in Nigeria’s electricity sector.
Aliyu explained that the high tariffs in rural areas are primarily driven by the substantial costs associated with deploying electricity infrastructure in these regions. Unlike urban centers, which benefit from established grid networks and economies of scale, rural communities often require bespoke solutions such as off-grid or mini-grid systems to deliver power. “There are communities, there are rural areas that pay more tariffs than Band A customers,” Aliyu stated. “The tariffs charged in rural communities are largely determined by the overall cost of infrastructure deployed by the agency to deliver power to those areas.”
The REA’s approach to electrification involves tailoring solutions to the specific needs and circumstances of each community. Aliyu noted that while some rural areas pay tariffs higher than N250 per kilowatt-hour, others benefit from lower rates, depending on the cost of infrastructure deployment. “They pay for their electricity, and they enjoy it, but there are other areas where the tariff is less than Band A,” he said. “It’s subjective on the total cost of infrastructure we deploy within those communities.” This variability reflects the challenges of delivering power to remote areas, where logistical and financial constraints often drive up costs.
Solar Mini-Grids: A Sustainable Solution for Rural Electrification
A key focus of Aliyu’s remarks was the REA’s success in deploying solar-powered mini-grids and interconnected mini-grids to address Nigeria’s rural electrification challenges. These systems, which operate independently of the national grid or in tandem with it, have proven to be a viable and sustainable model for delivering reliable electricity to underserved areas. Aliyu highlighted that the REA has completed dozens of such projects across all six geopolitical zones in Nigeria, powering critical institutions such as universities and general hospitals.
“Solar energy remains a viable and sustainable model for electrifying rural Nigeria,” Aliyu stated, emphasizing the transformative potential of renewable energy in bridging the electricity access gap. Mini-grids, which typically combine solar panels, battery storage, and backup generators, provide a reliable and environmentally friendly alternative to traditional grid-based electricity. By harnessing Nigeria’s abundant solar resources, these systems offer a cost-effective solution for communities that are too remote or sparsely populated to be connected to the national grid.
The REA’s mini-grid projects have had a tangible impact on rural communities, enabling access to electricity for households, businesses, and public facilities. For example, universities powered by these systems can conduct research and teaching without the disruptions caused by frequent power outages, while hospitals can maintain critical medical equipment and provide life-saving services. These projects not only improve quality of life but also drive economic activity by enabling small businesses to operate more efficiently and creating opportunities for entrepreneurship.
Challenges in Nigeria’s Power Sector
The revelation about high rural tariffs comes against the backdrop of Nigeria’s longstanding energy supply challenges. Despite being Africa’s most populous country and a major oil producer, Nigeria has struggled to provide reliable electricity to its citizens. The national grid, plagued by aging infrastructure, inadequate generation capacity, and transmission losses, delivers far less power than is needed to meet demand. As a result, millions of Nigerians rely on expensive and polluting alternatives such as petrol and diesel generators, which have seen fuel costs surge more than fivefold in recent years.
The privatization of the power sector in 2013, which saw the sale of generation and distribution companies to private investors, was intended to address these challenges by improving efficiency and attracting investment. However, the sector continues to face significant hurdles, including policy inconsistencies, regulatory bottlenecks, and insufficient funding for infrastructure upgrades. These issues have limited the ability of distribution companies (DisCos) to deliver reliable power, particularly in urban areas, while rural communities have often been left entirely unserved.
In 2024, the Nigerian Electricity Regulatory Commission (NERC) implemented a controversial tariff hike that increased rates for Band A consumers from N66 per kilowatt-hour to N225. The decision, aimed at improving the financial viability of DisCos and attracting investment to the sector, was met with widespread criticism from citizens and businesses already grappling with economic hardship. The rising costs of petrol and diesel, driven by global market dynamics and domestic policy changes, have further compounded the strain on households and businesses, making electricity affordability a pressing concern.
Rural Electrification and Economic Development
The REA’s efforts to electrify rural Nigeria are critical to addressing these broader challenges and fostering economic development. Access to reliable electricity is a prerequisite for productivity, education, and entrepreneurship, particularly in rural areas where economic opportunities are often limited. By deploying mini-grids and other off-grid solutions, the REA is helping to bridge the energy access gap and create a foundation for sustainable development.
However, the high tariffs faced by some rural communities raise important questions about affordability and equity. While these communities may enjoy more reliable power supply than their urban counterparts, the cost of electricity can place a significant financial burden on households and businesses. For many rural residents, who often have lower incomes than urban dwellers, paying tariffs as high as N250 to N280 per kilowatt-hour can be prohibitive, limiting the benefits of electrification.
Aliyu’s acknowledgment of the variability in rural tariffs highlights the need for a balanced approach to pricing that considers both the cost of infrastructure and the economic realities of rural communities. Subsidies, grants, or innovative financing models could help make electricity more affordable while ensuring the financial sustainability of mini-grid projects. Additionally, community engagement and education are critical to ensuring that residents understand the value of reliable electricity and are willing to pay for it.
The Role of Renewable Energy in Nigeria’s Future
The REA’s focus on solar-powered mini-grids aligns with global trends toward renewable energy and sustainable development. Nigeria, with its abundant sunlight and vast rural population, is well-positioned to leverage solar energy as a solution to its energy challenges. Unlike fossil fuel-based systems, solar mini-grids are environmentally friendly, cost-effective over the long term, and resilient to fuel price volatility. By investing in these systems, the REA is not only addressing immediate energy needs but also contributing to Nigeria’s transition to a low-carbon economy.
The success of the REA’s mini-grid projects also demonstrates the potential for public-private partnerships in the energy sector. By collaborating with private developers, international donors, and local communities, the agency has been able to scale its electrification efforts and deliver measurable impact. These partnerships are critical for mobilizing the resources needed to address Nigeria’s infrastructure deficit, which extends beyond electricity to include transportation, water, and telecommunications.
Addressing Disparities and Building Resilience
The revelation that some rural communities are paying higher tariffs than urban Band A consumers highlights the need for greater equity in Nigeria’s electricity sector. While the REA’s efforts to electrify rural areas are commendable, the high costs borne by some communities underscore the importance of addressing affordability alongside access. Policymakers must work to ensure that the benefits of electrification are distributed equitably, particularly for vulnerable populations.
One potential solution is the introduction of tiered pricing models that reflect the income levels and economic conditions of different communities. Cross-subsidization, where higher-income consumers or urban areas help offset the costs for rural customers, could also be explored. Additionally, investments in energy efficiency and demand-side management can help reduce the overall cost of electricity delivery, making it more affordable for all consumers.
The REA’s success in deploying mini-grids across all six geopolitical zones also highlights the importance of decentralization in Nigeria’s energy strategy. By focusing on localized solutions, the agency is able to tailor its interventions to the specific needs of each community, ensuring greater impact and sustainability. This approach contrasts with the centralized model of the national grid, which has struggled to deliver reliable power to remote areas.
Looking Ahead: A Path to Sustainable Energy Access
As Nigeria looks to the future, the REA’s efforts to electrify rural communities and address tariff disparities will be critical to achieving sustainable energy access for all. The agency’s focus on renewable energy, particularly solar-powered mini-grids, offers a scalable and environmentally friendly solution to Nigeria’s energy challenges. By continuing to invest in these systems, the REA can help bridge the energy access gap, drive economic development, and improve quality of life for millions of Nigerians.
However, addressing the high tariffs faced by some rural communities will require a multifaceted approach. Policymakers must balance the need to recover infrastructure costs with the imperative to make electricity affordable for all. This could involve increased government funding for rural electrification, partnerships with international donors, and innovative financing models such as pay-as-you-go systems. Public awareness campaigns can also play a role in educating communities about the benefits of reliable electricity and encouraging responsible usage.
The broader challenges facing Nigeria’s power sector, including policy inconsistencies and inadequate investment, must also be addressed to ensure long-term sustainability. The government’s commitment to reforming the sector, as evidenced by initiatives like the CBN’s recapitalization directive and the REA’s mini-grid program, provides a foundation for progress. By building on these efforts and fostering collaboration between public and private stakeholders, Nigeria can create a more resilient and equitable energy system.
Conclusion
The Federal Government’s disclosure that some rural communities in Nigeria are paying higher electricity tariffs than urban Band A consumers highlights the complexities and disparities in the country’s energy sector. While the REA’s success in deploying solar-powered mini-grids has brought reliable electricity to underserved areas, the high tariffs faced by some communities underscore the need for greater affordability and equity. The agency’s innovative approach to rural electrification, combined with its focus on renewable energy, offers a promising path forward, but more must be done to ensure that all Nigerians can access affordable and reliable power.
As Nigeria continues to grapple with its energy challenges, the REA’s efforts provide a model for how targeted interventions can drive meaningful change. By addressing tariff disparities, investing in sustainable infrastructure, and fostering public-private partnerships, the agency is helping to build a brighter future for rural communities and the nation as a whole. The path to universal energy access is fraught with challenges, but with continued commitment and innovation, Nigeria can overcome these obstacles and create a more inclusive and prosperous energy landscape.
