Public investments totaling N10tn injected into the power sector over the last 13 years have failed to yield significant progress, with power generation remaining stagnant at an average of 4,500 megawatts. The current output remains far below the target of 20,000MW and the national requirement of 30,000MW.
Despite the massive expenditure, the Minister of Power, Joseph Tegbe, has stated that the Federal Government is currently resetting the sector to fix long-standing structural problems. Tegbe stated, “within the next two to three years, Nigerians should experience a stronger grid, reduced technical losses, improved market discipline, greater investor confidence, expanded electricity access and significantly higher operational capacity”.
A breakdown of government expenditure since the privatization of the sector in November 2013 reveals that several intervention schemes, payment guarantees, multilateral loans, and debt settlement programs were deployed to resolve liquidity challenges. These include the Central Bank of Nigeria N213bn Nigerian Electricity Market Stabilisation Facility, the N701bn Payment Assurance Guarantee for generation companies, over N200bn spent under the National Mass Metering Programme, the N700bn Presidential Metering Initiative, and the €2.3bn Siemens Presidential Power Initiative.
In addition, projects worth over $2.4bn backed by the World Bank and the African Development Bank were executed, alongside the recently introduced N4tn Presidential Power Sector Debt Reduction Programme. However, a report by the Nigerian Electricity Regulatory Commission indicated that during the first quarter of 2026, average available generation capacity across 28 grid-connected plants stood at 4,457.96MW, while actual average hourly generation was 4,112.72MW, falling short of the 6,000MW government target.
The market continues to be crippled by a liquidity crisis. The Association of Power Generation Companies reported that unpaid electricity subsidies reached N6.2tn, comprising N4tn accumulated between 2015 and 2024 and N2.2tn incurred in 2025. Although the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, stated that a verification exercise reduced liabilities from about N4tn to approximately N3.3tn, the claims remain disputed.
Rejecting the revised figures, the Executive Director of APGC, Dr. Joy Ogaji, said, “We have asked them to publish how they arrived at the N3.3 trillion. We are owing gas suppliers about N4 trillion. If government owes us only N3.3 trillion, it raises many questions.” Ogaji added, “If N3.3 trillion is not even enough to pay the gas suppliers, how will GenCos cover operating costs, including operations and maintenance as well as staff costs?”
Data from the Nigerian Bulk Electricity Trading Plc showed that between April 2025 and April 2026, the Federal Government received subsidy invoices worth N1.859tn but paid only N76.95bn, leaving an unpaid balance of N1.78tn. To settle these obligations under the Presidential Power Sector Debt Reduction Programme, the Federal Government has turned to the domestic bond market. About N333bn has been disbursed to generation companies, with a fresh N729bn bond launched following an earlier N501.02bn bond issue.
Critiquing the performance of the sector, the President of the Nigeria Consumer Protection Network, Mr. Kunle Olubiyo, noted that government involvement has fueled inefficiencies and revenue leakages. Olubiyo said, “As much as government is desirous of injecting money, there is a value chain of beneficiaries of leakages and wastages.” He added, “Because government bears the burden, a lot of claims thrown into the electricity pool are virtually non-existent or have been orchestrated to create a desired end,”. He further noted, “If we completely privatise the sector, some of the inputs on which tariffs have been formulated will shrink because some of these leakages form the basis for determining tariffs. If the cost of generation, transmission and distribution is over-bloated, that becomes the basis for determining what consumers pay,”. Olubiyo advised the government to sell its remaining shares in distribution companies, unbundle and privatise the Transmission Company of Nigeria, and focus strictly on policy formulation and regulation.
Similarly, the President of the Chartered Institute of Power Engineers of Nigeria, Engr. Israel Abraham, attributed the ongoing failures to non-technical leadership. Abraham said, “The electricity industry is highly technical. Progress has stalled because the right people have not been allowed to manage the sector. Until competent professionals are put in charge, the industry will continue to struggle,”.
Responding to the challenges, Tegbe emphasized that the government was actively overhauling the system. Tegbe stated, “Our objective is clear. To make electricity more available, make the grid more reliable, make the market financially sustainable and restore investor confidence. Ultimately, we want to ensure that electricity becomes a catalyst for national productivity rather than a constraint to economic growth”. He commended President Bola Tinubu for demonstrating strong political commitment through sector liberalization and the implementation of the Electricity Act.
Tegbe explained, “Under his leadership, the power sector has moved from policy conversations to practical implementation. In addition, his administration has continued the implementation of the Electricity Act, creating an entirely new constitutional and regulatory landscape where states now have the opportunity to develop electricity markets that reflect their peculiar economic realities.” He added, “In line with this, the federal government is now advancing the Power Sector Bond initiative to resolve the enormous legacy obligations owed to generation companies, gas suppliers and other market participants.”
Tegbe remarked, “This is a strategic intervention designed to restore confidence, unlock fresh investment and return commercial discipline to the Nigerian Electricity Supply Industry.” Speaking on consumer billing, Tegbe noted, “Mr. President has equally placed metering at the centre of electricity reform. For decades, estimated billing became one of the greatest sources of distrust between electricity providers and consumers.” He stressed, “Today, through the Presidential Metering Initiative, Nigeria is moving decisively towards universal metering because consumers deserve transparency, fairness and confidence that they only pay for the electricity they actually consume.”
The minister added, “This administration has also prioritised investment in transmission infrastructure, expanded rural electrification, strengthened institutional coordination across the electricity value chain, and continued to pursue reforms that encourage private capital while preserving the public interest”. He noted that, “building upon this strong presidential foundation, the Ministry has immediately commenced a number of significant interventions.”
Outlining ongoing actions, Tegbe highlighted the launch of the Power Force initiative, saying, “These include inauguration of the Power Force. This initiative brings together 5000 Nigerian youths for meter installation across the country. Our objective is to close the metering gap and also develop a strong skilled pool of young Nigerians in electricity field (NAPTIN).” He added, “Secondly, we have made significant progress in resolving the age-long challenges surrounding meter procurement.”
Regarding generation capacity, Tegbe stated, “Thirdly, we are already witnessing encouraging improvements in electricity generation. Over the course of the last two weeks, we have consistently generated 5000MW.” He acknowledged, “Although much work remains, enhanced operational coordination, improved plant availability and better engagement across the value chain are beginning to produce measurable improvement.”
Tegbe acknowledged the broader systemic requirements, stating, “we are under no illusion. Generation alone does not solve Nigeria’s electricity problem. Electricity must be generated, transmitted, distributed and paid for. All these components must function simultaneously. That understanding forms the basis of our Sector Transformation Agenda.” He added, “Our diagnosis of the Nigerian Electricity Supply Industry is honest. The challenges are not confined to one institution. They exist across generation, transmission, distribution, regulation, governance and market liquidity”.
Outlining the key agenda items, Tegbe stated that the government would conduct a technical audit of the transmission network to identify aging infrastructure and vulnerabilities, work with regulatory bodies to harmonize federal and state regulations, execute a grid stabilization program along critical corridors including Lagos, Enugu to Port Harcourt, and Abuja to Kaduna to Kano, address liquidity losses, centralize strategic assets for industrial clusters, and launch a Super Grid Programme to expand transmission backbone capacity across the nation.
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