The organised labour has warned that the federal government’s plan to phase out electricity subsidies will worsen living conditions for millions of citizens and cripple businesses already struggling with rising costs.

Acting General Secretary of the Nigeria Labour Congress (NLC), Comrade Benson Upah, in a chat with LEADERSHIP Weekend, emphasised the potential fallout from higher tariffs and the devastating effects on both citizens and businesses.

Amidst fiscal pressures, the federal government is pushing for reforms in the energy sector, including a significant reduction in electricity subsidies.

Our flagship newspaper, LEADERSHIP, had reported that the Minister of Finance, Wale Edun, announced this after a recent cabinet meeting, with details of a debt refinancing plan scheduled for completion within weeks.

The initiative also includes targeted tariff hikes for large consumers—moves that the federal government expects will save over N1 trillion annually.

According to Edun, the government will introduce a pay-as-you-go model for electricity consumers to end government-sponsored subsidies in the sector.

However, the NLC sees the decision differently, stating that it would plunge millions of workers and their households into darkness, misery, distress, poverty, and resentment against the state.

Upah warned that these effects would not be limited to homes, as the business community would also bear the brunt.

“The business community will equally be hard-hit, as high tariffs are not good for business anywhere. We expect higher production costs, product and service glut due to low patronage, more closures, lay-offs, and an inevitable spike in social threats to society,” he said.

Upah further accused the government and power companies of collusion.

“There is an unholy marriage between them, yet none is going for a divorce. That tells you the extent of the rot and contradictions in the system,” he told LEADERSHIP Weekend.

Upah criticised the privatisation process in the electricity sector, suggesting that it needs a review—or even a reversal.

He pointed to unchecked corruption and inefficiencies, noting that government allocations thus far have surpassed allocations made during the NEPA era without commensurate improvements in service.

He argued that none of the subsidies has translated into efficient supply, with power sector entities still claiming the government is in default—prompting scepticism about the contracts signed and their enforceability.

Upah vowed that the NLC would continue organising and mobilising, through its appropriate organs, to respond effectively when government actions on subsidy removal become concrete.

“Congress has done its utmost in sensitising the government and its appropriate agencies to what needs to be done, and we followed up with street protests when they didn’t do the right thing.

“However, Congress does not intend to give up. The appropriate organs of Congress will meet and respond when government makes its move,” Upah declared.

Labour pointed the federal government to the United States government’s report that Nigeria’s minimum wage of ?70,000 is inadequate to lift millions of citizens out of poverty, citing weak enforcement and the effect of the naira’s sharp devaluation.

In its 2024 Country Reports on Human Rights Practices, released on 12 August 2025, the U.S. Department of State said Nigeria’s minimum wage, currently valued at about $47.90 per month, falls below the poverty income level.

“The National Minimum Wage (Amendment) Act 2024 doubled the minimum wage to N70,000 ($47.90) per month. Despite the increase, currency devaluation meant the minimum wage was no longer higher than the poverty income level,” the report said.

The report further noted that wage enforcement across the country remains weak, with many workers excluded from the law.

“The law provided for a national minimum wage for public and private sector employers with 25 or more full-time employees, with exceptions for seasonal agricultural workers, part-time workers, those on commission, and some others.

“Many employers had fewer than 25 employees, so most workers were not covered. Some states declined to implement the minimum wage law, citing financial constraints,” the U.S. added.

Upah added that even foreign governments are aware of the poverty situation in the country.

The U.S., in the report, also observed that while the law mandated a 40-hour work week, two to four weeks of annual leave, and overtime and holiday pay, it left gaps in defining premium pay and overtime.

“The law prohibited excessive compulsory overtime for civilian government employees,” it said.

The U.S. report, however, criticised the Nigerian government’s capacity to enforce labour standards.

“The federal government rarely effectively enforced minimum wage, overtime, and occupational safety and health (OSH) laws. Penalties were low and not commensurate with other crimes, such as fraud—and were rarely applied,” it noted.

Tinubu should lessen burden on Nigerians, not aggravate it – Secondus, Abdullahi

his part, a former national chairman of the Peoples Democratic Party, Prince Uche Secondus appealed to the President to reconsider the plan to remove the subsidy from electricity.

‘‘This is not the time to play with the welfare of Nigerians. Nigerians have endured well under the present regime. The President should not punish them again with another punishment.

‘’Rather than add to their burden, I think the President should think of how to less their burden,’’ he said.

An economist, Gabriel Adewuyi, said that though subsidies aren’t the best for the government, workers’ present salaries cannot sustain further income depletion.

According to him, ‘‘We agree that subsidy may not actually be good for the economy, but there is no government in the world that does not subsidise its citizens.

‘‘All advanced countries subsidise their economies in one way or the other. President Bola Tinubu should focus on how to increase production, establish more industries for the population.

‘‘Again, election is coming up in 2027. Is this the right time for him to increase the pain of the electorate? When he was campaigning three years ago, he said the prices of petroleum products would go down. Has it gone down?

‘‘When he got the votes and assumed office, the first thing he did was to remove the subsidy without putting anything in place to cushion the effect on Nigerians. Please, help us to beg him to soft-pedal.”

Also, the opposition coalition’s spokesman, Mallam Bolaji Abdullahi, accused the government of not paying attention to the welfare of the Nigerian people.

He said, ‘‘Look, we know what Nigerians are going through, but the people in government seem not to know.

‘‘That is why they want to increase their salaries. How much is N70,000 worth in the market now? Tell me, a father of three with one wife, what can he do with that amount?

‘‘A bag of rice is more than the minimum wage. Now, you say you still want the workers to tighten their belts, but the people in government are now losing their own due to the accumulation of weight as a result of enjoyment.

‘‘Welfare and security of the people are the two primary duties of the government. Tell me, is this government providing them? It is a matter of time; liberation will come soon,’’ he said. (Business Day)