Thirteen Years After Privatisation: Nigeria Still Faces Severe Power Crisis
Failed reforms and systemic debt leave Nigeria's power sector in perpetual darkness.
1Privatisation's Failed Promise
Thirteen years after the 2013 privatisation of Nigeria's power sector, the promised stability remains elusive. Despite an installed capacity exceeding 13,000 megawatts, actual generation consistently hovers between 4,000 and 5,000 megawatts. The national grid continues to suffer frequent collapses, leaving homes and businesses heavily reliant on expensive, polluting petrol and diesel generators.
2Economic Burden on Producers
The Manufacturers Association of Nigeria reported that members spent over ₦1.5 trillion on alternative energy in 2025 alone. Rising energy costs have created a fourfold financial shock for large firms, while small businesses struggle to survive. This energy dependency acts as a direct, significant constraint on Nigeria's broader economic growth ambitions.
3The High Cost of Failure
When the national grid fails, Nigerians pay three to four times more for electricity generated by diesel or petrol. While grid-connected Band A customers pay approximately ₦209 per kilowatt-hour, diesel-generated power costs roughly ₦950. These inflated energy costs are inevitably passed on to consumers through higher prices for essential goods like bread.
4Structural Flaws in Ownership
The initial privatisation process was marred by the sale of assets to undercapitalised investors with limited utility experience. Many distribution companies have since fallen under the control of lenders or the Asset Management Corporation of Nigeria due to insolvency. This failure effectively leaves critical national infrastructure in a state of perpetual financial receivership.
5A Vicious Debt Cycle
The power sector is trapped in a massive debt cycle where bills go largely unpaid. By June 2026, the debt owed to generation companies reached approximately ₦7.66 trillion, with projections suggesting it could hit ₦17 trillion by 2033. This liquidity crisis prevents generators from paying gas suppliers, leading to frequent, idle power plants.
6Political Pricing and Subsidies
Electricity tariffs are frequently set by political considerations rather than economic principles, creating an unfunded subsidy burden. Governments often avoid raising tariffs during election seasons to appease voters, leaving the system underfunded. This approach guarantees the worst outcome: consumers pay too little for a functioning system and too much for replacements.
7Weak Regulatory Enforcement
Regulators have consistently failed to enforce performance standards, leaving millions of customers unmetered and subject to arbitrary estimated billing. This lack of transparency breeds deep public distrust and encourages non-payment. Even when premium Band A customers pay for 20 hours of supply, they often receive far less without adequate regulatory recourse.
8Urgent Audit and Reform
The government must conduct a transparent, published audit of all generation and distribution companies against their original privatisation commitments. Operators unable to recapitalise or deliver reliable power should be required to divest. Thirteen years of stagnation is sufficient evidence that the current policy framework requires a complete, honest, and decisive strategic overhaul.
9Decentralisation and New Opportunities
The Electricity Act 2023 provides a pathway for states to regulate their own power markets. By creating credible frameworks for mini-grids and embedded generation, states can bypass the failing national grid. This decentralised approach offers a faster route to attracting private investment compared to the slow, complex process of fixing national infrastructure.
10Transmission Network Bottlenecks
The national transmission network has failed to keep pace with demand, resulting in over 120 grid collapses in the last eleven years. Without sustained investment and independent management of the transmission infrastructure, any new generation capacity will remain stranded. A stable grid is the essential foundation for any future energy sector recovery.
11The Unforgiving Scorecard
History will judge this reform by whether a generation of Nigerians grew up with reliable electricity. By that metric, the policy has failed across every dimension, from financial sustainability to operational efficiency. Fixing the power sector is not merely one priority; it is the fundamental precondition for building a $1 trillion economy.