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Federal Government to introduce pay-as-you-go electricity payment system.
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Transition pending clearance of N4 trillion debt owed to power sector investors.
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Revenue allocation to sub-national governments exceeds N7 trillion in H1 2025.
The Federal Government is set to implement a pay-as-you-go approach for electricity consumption as part of its plan to eliminate government-sponsored subsidies.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed the plan at a media briefing in Abuja on Thursday.
Mr. Edun said the new payment system will take effect only after the outstanding N4 trillion liability owed to electricity sector investors is cleared.
The liability represents accumulated debts from previous administrations and is being addressed to transition the sector into a fully deregulated industry.
He added that the programme is designed to improve collections and ensure that electricity investors sell directly without depending on government payments.
“Going forward, that programme has been built as well, looking at ways of making sure that collections increase, making sure that there’s more of a pay-as-you-go approach that doesn’t leave government with a bill to pay,” Mr. Edun stated.
The minister also revealed that sub-national governments have received over N7 trillion in allocations during the first half of 2025, covering monthly revenue shares, 1.8 per cent of GDP, and unpaid statutory allocations.
The pay-as-you-go model is expected to reduce government fiscal exposure in the electricity sector.
Restructuring of power purchase agreements will prevent future accumulation of liabilities.
