The Federal Government has announced key reforms in the power sector, prioritizing smart metering, targeted subsidies, and debt reduction to improve electricity supply in Nigeria.
A major part of the plan is the Presidential Metering Initiative (PMI), which aims to roll out seven million prepaid meters starting in 2025. This initiative will eliminate estimated billing and bring transparency to electricity charges.
“This will finally put an end to the practice of estimated billing, giving consumers confidence in what they are paying for and ensuring transparency in electricity charges,” the statement said. The government expects that metering will also help improve revenue collection and attract investments to strengthen Nigeria’s power infrastructure.
The statement also dismissed recent reports of a 65% increase in electricity tariffs, calling them a “misrepresentation.” Instead, it clarified that while tariffs now cover about 65% of the actual cost of electricity supply, the government continues to subsidize the difference.
“The immediate focus is on taking decisive action to deliver more electricity to Nigerians, ensure fewer outages, and guarantee the protection of the poorest and most vulnerable Nigerians,” the government stated.
Currently, the Federal Government spends over ₦200 billion per month on electricity subsidies. However, much of this support benefits the wealthiest 25% of Nigerians rather than those in real need.
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To address this imbalance, the government is working on a targeted subsidy system to ensure that low-income households receive the most support. “This approach will make electricity more affordable and accessible for millions of hardworking families,” the statement added.
Another key reform is the settlement of debts owed to power generation companies. The government acknowledged that these debts have prevented investments in new infrastructure and hindered electricity supply.
“By clearing these outstanding obligations, we are ensuring that power companies can reinvest in better service delivery, stronger infrastructure, and a more stable electricity supply for all Nigerians,” the statement read.
To help Nigerians cope with power challenges, the government is also introducing fiscal incentives such as VAT and Customs Duty Waivers to lower the cost of alternative power sources like Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG).
The statement reassured Nigerians that all reforms are aimed at creating a stable and affordable electricity system. “Every policy is designed with the Nigerian people in mind—eliminating unfair estimated billing, ensuring subsidies benefit the right people, and creating the conditions for stable, affordable electricity,” it said.
The government believes these changes will lead to better service delivery, wider access to electricity, and overall economic growth for Nigerians.