Ask Nigeria Header Logo

No progression with the Service Based Tariff

Photo of author

By Dawn

As taxes raise the price of electricity for Nigerians, supply remains shockingly low.

The Service Based Tariff (SBT) Tax was introduced in Nigeria in an effort to increase energy production throughout the country. This new tax charge fees for every services they provide, and it is hoped that this will incentivize businesses to increase their production and help to improve the Economy.

There are some who argue, however, that the SBT will have the opposite effect and will actually discourage businesses from expanding. It remains to be seen how this new tax will play out, but it is an important development in Nigeria’s economy. Recent inspections confirm that these problems are worse than we originally thought.

This tax is intended to update the country’s aging infrastructure.

The Power sector in Nigeria has been in crisis for many years. The lack of a stable Power Supply has caused widespread blackouts, which in turn has had a negative impact on the economy. To address this problem, the Nigerian government introduced a new tax specifically for the power sector. This tax is intended to update the country’s aging Infrastructure and ensure a constant supply of Electricity without blackouts.

Nigeria has the potential to generate over 12,000 megawatts of electric power, but the country is currently generating around 4000 megawatts on average, this number has been relatively the same over the last 7-8 years. With ongoing significant Investment, it appears that not much has changed with electricity supplies in our Country. This is sure to be a major concern for voters in the upcoming 2023 elections.

The situation has created challenges for businesses and households.

According to Transmission Company of Nigeria (TCN), the country’s power supply has become unstable and inconsistent, with challenges at over 14 generation plants keeping output at record low levels. The situation has created numerous challenges for both businesses and households, as the lack of power has resulted in increased costs for both groups.

The Nigerian industrial sector, for example, has lost an estimated $5 billion in Revenue due to the power shortages, and the lack of power has also forced many businesses to close. Households have also been hit hard by the power shortages, as the cost of electricity has increased by over 100%

Fixing existing structures would boost availability by 30/40%.

Well over one third of Nigeria’s Power Generation capacity is offline. Nigeria is committing to expanding the sector by adding new plants and new sources of energy, but fixing existing structures would boost availability by 30/40%, short term advances sometimes have a better impact than long term solutions, but both need to be considered when addressing this problem.


The content on is given for general information only and does not constitute a professional opinion, and users should seek their own legal/professional advice. There is data available online that lists details, facts and further information not listed in this post, please complete your own investigation into these matters and reach your own conclusion. Images included with this information are not real, they are AI generated and are used for decorative purposes only. Our images are not depicting actual events unless otherwise specified. accepts no responsibility for losses from any person acting or refraining from acting as a result of content contained in this website and/or other websites which may be linked to this website.