The last article in this column and on the power sector was titled, “No quick fixes to Nigeria’s power sector woes.” The article concluded that privatisation of all government assets in the power sector was the ultimate solution to the perennial challenges of the Nigerian power sector. True, but that is not to say the Federal Government has not done much in the direction of market-oriented policy reforms in the power sector. So much has been done for which the government and indeed the immediate past minister of power Chief Adebayo Adelabu should be commended. For the avoidance of doubt, I have never met with nor spoken to Mr. Adelabu, so I do not hold any brief for him. To be fair to him, he took a number of measures to stabilise and improve the power sector in the three years he was in office.

More specifically, the following are some of the major achievements he recorded in office as minister of power: 1). He drove up power generation to a historical milestone of 6,003 megawatts (mw) March 2, 2025 supported by the integration of Zungeru hydropower plant; 2); he inaugurated the Electricity Act 2023, which decentralized the electricity market, creating subnational electricity markets (at the state government level), some of the benefits of which we are beginning to see in Lagos State for example where ambitious plans to significantly turn around and rapidly expand the Lagos State electricity market are being rolled out with the active support of the private sector; 3). Financial restructuring and securitisation of N4 trillion debt owed by the Federal Government to upstream gas producers, thereby enhancing their liquidity and their ability to reinvest and expand gas supply to thermal power plants; 4). the accelerated massive meter rollout to close the metering gap under the Presidential Metering Initiative with the support of the World Bank under which millions of electricity consumers are being metered, thereby significantly reducing commercial losses to electricity distributing companies (Discos) and enhancing their liquidity and ability to invest in power distribution infrastructure; 5.) expanding and strengthening the national grid under the Presidential Power Initiative, although admittedly very little success seems to have been recorded here, as the wheeling capacity of national grid remains the weakest link in Nigeria’s electricity supply value chain; and 6.) the expansion of off-grid and mini-grid and solar electricity solutions to over 3 millions rural dwellers and institutions of higher learning in Nigeria. However, the downside was his reluctance, just like his predecessors in office, to face up with the reality of government letting go of the power sector in favour of complete private sector ownership and control like in the telecom sector. This remained a key reason for the limited success of his impassioned efforts while in office.

The All Progressive Congress (APC) led administrations beginning with President Muhammadu Buhari have shied away from the outright sale or privatisation of government assets in the power sector. Well over 60 percent of the total assets of the power sector are still in the hands of the federal and state governments. However, the government has sought to introduce a number of market-oriented policy measures to attract private capital into the power sector and enhance power supply and efficiency. The Electricity Act 2023 has ample provisions seeking to expand private sector involvement and investment, for example, in the national grid.

Under the Electricity Act 2023, the Nigerian electricity market has been decentralized from a government owned social service-oriented monopoly to a more competitive commercialised market, with heavy users of electricity being charged cost-reflective rates–the so-called ‘Band A’ users. It is hoped with time more users will be migrated to a more cost-reflective band and eventually by the time, say, eighty percent or more of electricity consumers pay something close to the cost-reflective tariff, the rate can be more evenly ironed out across most consumers. (Significantly increasing power generation; and transmission and distribution efficiency will also bring down the average cost of electricity and tariff). Building on the partial privatisation of electricity distribution companies (Discos) and the privatisation of a number of thermal plants under the now abrogated Electric Power Sector Reform Act 2005, the 2023 Act unbundled the national electricity market with subnational states being able to set up their own electricity regulatory frameworks for their electricity markets, thus devolving powers to state governments to develop their electricity markets at a pace commensurate to their energy requirements.

With market unbundling and state electricity regulatory frameworks, increasing transition to cost-reflective tariffs, more public-private partnership arrangements between state governments and private sector power suppliers, separation of distribution through which the Electricity Act 2003 unbundles power distribution to allow specialised entities to sell power directly to consumers, the liquidation of trillions of naira of debt to upstream gas producers; the phasing out of electricity subsidies; allowance of off-grid self-generation by mainly heavy industries; and aggressive rollout of renewable energy, all under the purview of the 2023 Electricity Act, the stage is now set for further expanding the scope for private sector involvement.

This should begin with the federal and state governments selling off their 40 percent shares in the Discos to the investing public through initial public offerings (IPOs) on the floor of the Nigerian Exchange Group (NGX) – the Nigerian stock exchange. This will make the Discos more liquid and enable them access to multiple channels of financing both short-term liquidity and long-term capital investment to expand their power distribution backbone. This very act will expand the scope of the Nigerian capital market and subject the Discos to the stringent corporate governance and financial reporting standards of the NGX, thus enhancing their overall technical, financial management and organisational effectiveness, which will rub off positively on reliable power distribution. This in itself will be a significant milestone in the development of the Nigerian power sector.

The next step will be the sale of the stranded power plants of the Niger Delta Power Holding Company (NDPHC). While taking into cognizance the commendable work the current management of the company seems to be doing, it is time the assets of those ten gas-fired plants are sold to competent power sector entrepreneurs to invest in and turn around. (The very term, ‘power-holding,’ implies or connotes an ad-hoc or temporary arrangement). The great work Transcorp Power has done in turning around and expanding the Ughelli power plant is a clear testimony of the power of the private sector to turn around the Nigerian power sector.

Finally, the national grid has to be privatised. The Federal Government of Nigeria which exclusively owns the national grid has neither the financial muscle in the face of competing national development needs nor the technical know-how to run the national grid of an anticipated $1 trillion economy. The early the government comes to terms with the reality the better. Currently the power sector is the greatest saboteur of Nigeria’s economic growth potential and the aspiration of a $1 trillion economy. The government should go to the United Kingdom to learn how to privatise its national grid.

This is the agenda the new Minister of Power, Mr. Mr. Joseph Olasukanmi Tegbe should embrace. In the shortest term, he should endeavour to stabilise the national grid, which has suffered from years of infrastructure deficits and under-investment; and ensure that the financial engineering process to liquidate debts owed to upstream gas producers kicks in fast enough to increase gas supply to the thermal plants. Turning around the power sector is not rocket science. If Mr. Tegbe breathes confidence into his technocrats and engineers and effectively mobilises and applies required resources, his heroic pledges to the National Assembly and Nigerians may be achieved.
Mr. Igbinoba is Team Lead/CEO at ProServe Options Consulting, Lagos