Powering Nigeria’s Future: 5 Years To Uninterrupted Power

Nigeria’s persistent electricity crisis remains one of the most significant barriers to national development, with ripple effects across all sectors of the economy. Despite numerous reforms, policies, and investments over decades, the dream of reliable power supply continues to elude Africa’s most populous nation. The Electricity Act 2023 represents the latest attempt to revolutionize the sector, but critical examination reveals both promise and pitfalls in the journey toward 24/7 electricity.

The stark reality is that Nigeria currently generates only about 4,000-5,000 megawatts for over 200 million people—grossly inadequate compared to South Africa’s 40,000+ megawatts for a population less than a third of Nigeria’s. This disparity illustrates the magnitude of the challenge, but not its impossibility.

The new legislation’s decentralization approach offers a paradigm shift by empowering states, companies, and individuals to generate and distribute electricity. This could potentially break the stranglehold of inefficiency that has characterized the national grid system. States like Lagos, Rivers, and Edo have already begun exploring independent power projects, signaling growing confidence in this model.

The unbundling of the Transmission Company of Nigeria (TCN) into two entities—the Nigerian Independent System Operator (NISO) and the Transmission Service Provider (TSP)—is a major step toward improving electricity reliability in Nigeria. Previously, TCN handled both transmission infrastructure and system operations, but this dual role led to inefficiencies and frequent grid collapses. By separating these functions, NISO now focuses on grid management and electricity market operations, while TSP oversees physical infrastructure such as transmission towers and substations. This restructuring is expected to enhance grid stability, efficiency, and transparency, making 24/7 electricity supply more achievable.

Siemens’ role in Nigeria’s electricity sector comes through the Presidential Power Initiative (PPI), a partnership aimed at modernizing the grid and increasing transmission capacity. Siemens has been involved in upgrading substations, installing new transformers, and improving distribution networks to reduce losses and enhance power delivery. Their intervention is crucial in ensuring that the grid can handle increased electricity generation and distribution efficiently.

However, the ₦4 trillion debt owed to generation companies (GenCos) remains a significant challenge. This debt affects their ability to invest in maintenance, fuel procurement, and capacity expansion, leading to reduced power generation. Without resolving this financial burden, achieving uninterrupted electricity supply will be difficult, as GenCos need stable funding to sustain operations. Encouragingly, the Federal Government of Nigeria has pledged to urgently address this debt, with plans to pay a substantial portion immediately while settling the balance through financial instruments like promissory notes within six months. Reports indicate that at least ₦2 trillion is expected to be paid before the end of the year, which should provide immediate relief to the struggling power generators.

The Act alone cannot guarantee success. Nigeria’s power sector challenges extend beyond legislative frameworks to include technical inefficiencies, vandalism, inadequate gas supply, and corruption. The transmission infrastructure remains fragile, with frequent system collapses highlighting its vulnerability. Additionally, the financial viability of the electricity market continues to suffer from liquidity crises, with distribution companies struggling with debt while consumers resist cost-reflective tariffs.

The Nigerian power sector is grappling with a crippling crisis as rampant electricity theft and infrastructure vandalism continue to threaten power supply. Although Nigeria is not able to generate enough electricity to power the country, these thefts and vandalism significantly worsen the situation. Due to these concerns, millions of homes and businesses have struggled without reliable access to electricity for decades. In recent years, the Transmission Company of Nigeria reported several incidents of vandalism, resulting in significant disruptions to power supply across the nation.

The economic impact is staggering. In June 2020, Electricity Distribution Companies lost over N30 billion of their monthly revenues to energy theft, meter bypass, vandalism, and unpaid electricity bills by consumers. By September 2021, TCN had lost N1.7 billion in nine months to vandalism of electricity infrastructure in Maiduguri and its environs alone. More recently, in January 2025, the minister of power revealed that over N9 billion was spent to restore vandalised power infrastructure in the northern part of Nigeria in 2024.

The frequency and sophistication of these attacks have escalated alarmingly. In November 2024, the Nigerian government disclosed it had spent about N8.8 billion to repair transmission towers vandalised across the country. The Managing Director and Chief Executive Officer of TCN, Suleiman Abdulaziz, explained that between January 13 and November 27, 128 transmission towers were destroyed by vandals or bandits across the country. Some of these were not mere opportunistic theft but coordinated attacks using explosives, as evidenced when dynamites were used to bring down towers and lines on the Shiroro-Mando-Kaduna transmission lines, plunging almost the entire northern part of the country into darkness for over two weeks.

In response to these challenges, the Ministry of Power has allocated N8 billion in its 2025 budget specifically for advocacy, education, enlightenment, and provision of technology to protect power infrastructure. According to the Minister of Power, Adebayo Adelabu, the fund will be used to enlighten Nigerians on the importance of protecting and taking ownership of power infrastructure and other national assets. More controversially, Adelabu has recommended the death penalty for persons who steal power infrastructure, reflecting the severity of the problem’s impact on national development.

Making 24/7 electricity achievable within five years requires a multi-pronged approach. Nigeria must rapidly expand its generation capacity through a balanced mix of conventional and renewable sources. The country’s abundant solar resources remain largely untapped, with potential for 427 GW of solar capacity. Strategic investments in solar farms across the northern states could add significant capacity while addressing regional power disparities.

Simultaneously, the transmission network requires urgent modernization and expansion. The recent restructuring of TCN provides a foundation, but substantial investment in both NISO and TSP is needed to realize the potential benefits of the separation. The willing-buyer-willing-seller models create promising pathways for industrial clusters and high-consumption zones to secure dedicated power supply arrangements.

The distribution segment presents perhaps the greatest challenge, requiring technological upgrades to reduce technical losses and comprehensive metering to address commercial losses. Following an assessment of systemic challenges plaguing the electricity distribution companies, the President Bola Tinubu-led Nigerian government has announced plans to overhaul the distribution companies. Some of the issues identified include governance gaps, infrastructure deficits, and commercial inefficiencies. This move was disclosed by the Minister of Power, Adebayo Adelabu, after a meeting with the Japanese International Cooperation Agency, which presented a roadmap titled “Revamping of the Distribution Sector in Nigeria.”

According to reports, Adelabu said, “We can no longer fold our hands and watch the inadequacies of DisCos, whose performances fall short of expectations. This pilot is not optional; we will use regulatory authority to restructure underperforming DisCos and compel compliance if necessary.” The pilot scheme, slated to commence between May and August 2025, will target one DisCo in the North and another in the South, starting with two underperforming DisCos.

This government intervention follows earlier concerns raised by lawmakers. In November 2024, in a motion sponsored by Ayokunle Isiaka, the member representing the Ifo/Ewekoro Federal Constituency of Ogun State, the House of Representatives called for action to address the activities of DisCos in Nigeria under the title “Need to Address the Activities of Distribution Companies in Nigeria.” The lawmakers subsequently mandated a House Committee on Power to investigate DisCos in a bid to safeguard Nigerians’ interests. It remains unclear if the most recent move by the Minister of Power is connected to his recent complaint about the need for “Nigerians to pay cost-reflective prices for electricity.”

The current estimated 50% loss rate between generation and end-users represents an unsustainable inefficiency that drains the sector financially. Electricity tariffs across ECOWAS member states vary due to differences in generation costs, subsidies, and infrastructure investments. As of March 2025, Nigeria’s electricity tariff for Band A consumers—those receiving a minimum of 20 hours of electricity per day—was ₦225/kWh, while other ECOWAS countries have tariffs ranging between $0.10 to $0.30 per kWh, depending on their energy mix and regulatory frameworks.

The cost of 1 kWh of electricity directly impacts the feasibility of 24/7 power supply in Nigeria. Higher tariffs can discourage consumption, while lower tariffs—if not cost-reflective—can lead to financial strain on electricity providers, affecting investment in infrastructure and generation capacity. Nigeria’s electricity sector has struggled with pricing inconsistencies, leading to revenue shortfalls that hinder expansion and maintenance efforts. 

A comparative analysis of electricity costs across major African oil-producing countries from 2023-2025 shows significant variations: Egypt at $0.024 per kWh, Angola at $0.016, Morocco at $0.117, South Africa at $0.184, Algeria at $0.040, Libya at $0.008, and Nigeria at $0.037. These differences largely stem from varying subsidy structures, oil wealth management approaches, and infrastructure development levels. Libya’s remarkably low rate reflects its heavy subsidization policy, while South Africa’s higher cost correlates with its more developed and extensive grid system. Nigeria’s rate notably decreased from $0.09 in 2023, likely reflecting recent policy adjustments in the electricity sector.

To achieve constant electricity, Nigeria must balance affordable tariffs with cost recovery for power companies, requiring investment in renewable energy, improved billing systems, and efficient grid management to reduce losses and ensure sustainable power delivery.

Financing this transformation demands creative approaches. Nigeria could establish a dedicated Electricity Infrastructure Fund, sourced from multiple streams including pension funds, diaspora bonds, and multilateral financing. This fund must prioritize clearing the crippling debt owed to GenCos while simultaneously investing in critical infrastructure upgrades. 

To manage the remaining power sector debt, Nigeria could draw lessons from other countries that have successfully addressed similar challenges. India, for instance, implemented the Ujwal DISCOM Assurance Yojana (UDAY) scheme, which converted distribution companies’ debt into state-backed bonds, providing immediate financial relief while imposing operational efficiency targets. Similarly, Turkey successfully restructured its power sector debt through a combination of debt-to-equity conversions and extended repayment terms, allowing utilities to regain financial stability while continuing necessary investments.

Nigeria could adopt strategies similar to how it managed IMF debts, including debt restructuring by converting outstanding payments into long-term financial instruments to reduce immediate fiscal pressure. Public-private partnerships could inject much-needed liquidity, while targeted subsidies would ensure cost-reflective tariffs while protecting economically disadvantaged consumers. Revenue optimization through strengthened billing systems and increased foreign investment in infrastructure upgrades would complement these financial measures. Successful models from countries like Vietnam and Morocco demonstrate how focused investment programs can rapidly transform electricity access when properly executed.

The human factor cannot be overlooked. Technical training institutes dedicated to power sector skills development should be established in each geopolitical zone, creating both employment opportunities and addressing the skills gap that hampers maintenance and operations.

Governance and accountability issues also demand immediate attention. The House of Representatives has recently begun investigating the National Mass Metering Programme (NMMP), for which N200 billion was earmarked in 2020 to enable Licensed Electricity Distribution Companies provide free meters to Nigerian electricity consumers. The programme was introduced by the Central Bank of Nigeria in collaboration with Nigeria Electricity Regulatory Commission and other key stakeholders in the electricity supply industry to help manage conflicts between energy users and distribution companies, eliminate arbitrary billing, close metering gaps, and improve network monitoring.

According to the chairman of the investigation committee, Honourable Uchenna Harris Okonkwo, the programme was intended to be implemented in three phases to ensure reduction of collection losses and improve market remittances. Under the pilot phase ‘0’, CBN commenced with N59.280 billion for procurement and installation of 1 million meters in 2020 at an interest rate of 9 percent after a two-year moratorium. However, investigations revealed that instead of the pronounced amount, only N55.4 billion was released for 962,832 meters instead of the planned 1 million. More concerning is that the eleven Electricity Distribution Companies who received the loan have repaid only N7.1 billion as of 2024, without the 9 percent interest on the loan.

This situation raises questions about how NESI SSL (the Special Purpose Vehicle created for NMMP), Meristerm Wealth Management Limited, and Meristerm Securities Limited handled the programme in the national interest. Additionally, phase 1 of the NMMP, which CBN and Deposit Money Banks were to fund for 1.5 million meters, and phase 2, which the World Bank was to fund for 4 million meters, have not been addressed. The House of Representatives, relying on its powers under Sections 88 (1) and (2) of the 1999 Constitution, has established a sub-committee to investigate the disbursement and utilization of the N200 billion CBN loan to electricity distribution companies.

Public engagement must improve significantly. Citizens have grown skeptical of electricity reforms after years of unfulfilled promises. A transparent progress-tracking system, accessible through digital platforms, would allow Nigerians to monitor developments and hold authorities accountable, building renewed trust in the process.

Nigeria’s federal structure presents both challenges and opportunities. While the new Act enables state-level initiatives, interstate coordination remains crucial, particularly for resource-sharing and load balancing. A National Electricity Council comprising federal and state representatives could facilitate this coordination without undermining state autonomy.

Encouragingly, emerging technologies offer Nigeria opportunities to leapfrog traditional development stages. Battery storage solutions are becoming increasingly affordable, enabling greater integration of renewable sources. Similarly, smart grid technologies can optimize distribution and reduce losses, while blockchain applications could revolutionize payment systems and improve collection efficiency.

The experience of countries like Vietnam, which increased electricity access from 14% to near-universal within two decades, demonstrates that rapid transformation is possible with political will and strategic implementation. Nigeria can adapt these lessons while developing context-specific solutions

Ultimately, achieving 24/7 electricity within five years requires unprecedented commitment across all stakeholders—government at all levels, private sector, development partners, and citizens. It demands thinking beyond conventional models and embracing innovation in technology, financing, and governance.

The path forward is challenging but clear: decentralized generation with a strong renewable component, modernized transmission infrastructure, technologically enhanced distribution, creative financing mechanisms, skills development, and transparent governance. While the efforts through the Electricity Act 2023, TCN restructuring, and the Siemens partnership are promising, full implementation and financial stability are key to realizing 24/7 electricity in Nigeria. With these elements working in concert, Nigeria can finally illuminate its path to sustainable development and realize the transformation