The Federal Government has signalled that local governments could soon become active participants in Nigeria’s electricity market, as the Tinubu administration deepens its decentralisation drive in the power sector.
Minister of Power Adebayo Adelabu made the disclosure on Wednesday in Abuja during the inauguration of the board of the Nigeria Electricity Management Services Agency (NEMSA), saying evolving reforms would progressively open the sector to grassroots involvement.
“Very soon, as we evolve in this decentralisation objective, local governments will start showing interest in participating in this sector,” Adelabu said.
The statement follows amendments to the Electricity Act 2023, which empowered states to generate, transmit, and distribute electricity within their jurisdictions. Since the amendments took effect, 17 states have begun establishing subnational regulatory frameworks and electricity markets to attract investment and improve supply.
Adelabu said the next phase of reforms could position local governments to play complementary roles in rural electrification, mini-grid deployment, and last-mile distribution moves he said would help close Nigeria’s longstanding electricity access gap and ease pressure on the national grid.
The minister also announced plans to procure a minimum of 10 million electricity meters over the next five years to address an estimated shortfall of over seven million meters nationwide.
“The amount of meters we are going to acquire over the next five years will not be less than 10 million,” he said, stressing the need to shift from importation to local manufacturing.
“Must we import all this and use our wealth to create prosperity for other countries? We must start manufacturing our meters here, employ our people, train our people and pay our taxes here,” Adelabu said.
He noted that approximately 90 per cent of power equipment used in Nigeria is currently imported, a situation he described as costly and a drain on foreign exchange reserves. The government, he added, was committed to promoting domestic production of meters, batteries, and other components.
Adelabu also pointed to Nigeria’s lithium reserves as a strategic asset for local battery manufacturing and clean energy development, noting that the country had already begun producing solar panels for export to neighbouring countries.
At the event, Adelabu inaugurated the new NEMSA board, describing its mandate as fundamental to building investor and public confidence in the power sector.
“NEMSA occupies a uniquely critical position within the Nigerian electricity supply industry. Your mandate to inspect, test and certify electrical installations is fundamental to building a power system that Nigerians and investors can trust,” he said.
He directed the board to adopt a zero-tolerance stance on substandard electrical materials, warning that lax enforcement had contributed to system losses, equipment failures, and safety risks across the value chain.
“A zero-tolerance approach to substandard infrastructure is non-negotiable if we must achieve a reliable electricity market,” the minister said.
In her remarks, the NEMSA Board Chairman acknowledged the scale of the task ahead, pledging broad stakeholder collaboration to discharge the agency’s mandate effectively.
“We acknowledge that the task is very tough and NEMSA plays a very critical role. We will collaborate with all stakeholders in the power sector,” she said.
Adelabu also noted that over 70 per cent of generation companies and all 11 electricity distribution companies are now privately owned, describing the development as a structural transformation requiring updated regulatory frameworks. He added that the government had begun transitioning to cost-reflective tariffs to ensure long-term financial sustainability in the sector.
Much of the country’s power infrastructure, he said, is over 60 years old and requires urgent rehabilitation across generation, transmission, and distribution networks.
NEMSA serves as Nigeria’s technical regulator for electrical standards, with responsibility for the inspection, certification, and enforcement of safety compliance across the electricity supply chain.
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