Hauwa Ali
Nigeria’s electricity sector has been a persistent sore point fordecades, plagued by inadequate generation, inefficient distribution,and crippling power outages. Millions of Nigerians continue to endure unreliable power supply despite successive government interventionsaimed at reforming the system.
The recent statements by the Senate that the 2022 power sector privatization exercise was a total failure echoes the frustrations of ordinary Nigerians who have lived through the consequences of this dysfunction.
While former President Muhammadu Buhari and his predecessors attemptedvarious reforms, the newly enacted Electricity Act under President Bola Ahmed Tinubu’s administration signals a new chapter for the sector.
Former President Muhammadu Buhari played a pivotal role in reshaping Nigeria’s electricity sector. His administration undertook significantinitiatives, including legislative reforms, policy liberalization, and landmark infrastructure projects and his contributions are transformative.
The Electric Power Sector Reform Act (EPSRA 2005) and Privatization
While the foundation of power sector reforms can be traced tothe Olusegun Obasanjo administration, Buhari’s tenure furthered these initiatives.
The unbundling of the National Electric Power Authority (NEPA) into the Power Holding Company of Nigeria(PHCN) and its subsequent privatization was part of the foundation of Nigeria’s electricity reforms. This restructuring aimed tointroduce competition, attract private investment, and improve servicedelivery. However, the privatization of the power sector under Buhari faced significant challenges. Distribution companies (DisCos) and generation companies (GenCos), handed over to private operators, were unable to meet their obligations due to funding constraints, inadequate infrastructure, and inefficiencies.
Hence, in 2022, the Senate declared the privatization exercise a failure, echoing public sentiments.
Presidential Power Initiative (PPI) was Buhari’s flagship project in the power sector, the Presidential Power Initiative (PPI), was launched inpartnership with Siemens in 2019. The initiative aimed to unlock an additional 2,000MVA of operational capacity in Nigeria’s transmissionnetwork by addressing bottlenecks in power distribution andtransmission.
The PPI, while ambitious, faced delays and slow implementation due tobureaucratic red tape, funding challenges, and technical complexities. Its goals remain partially unmet, though its potential to modernizeNigeria’s power infrastructure cannot be underestimated.
Petroleum Industry Act (PIA) and Gas-to-Power Investments
The signing of the Petroleum Industry Act (PIA) in 2021 was another key milestone under Buhari. By incentivizing gas exploration and utilization, thePIA sought to stimulate gas-to-power investments and address Nigeria’sreliance on expensive diesel generators. However, implementing the acthas been slow, leaving its potential largely untapped.
Although President Mohamadu Buhari administration inherited a sector burdened by systemic inefficiencies and unfulfilled promises. He was able to sign a constitutional amendment allowing states to license the generation, transmission, and distribution of electricity.
However, the enactment of the Electricity Act which was signed by President Bola Ahmed Tinubu, which further empower states to achieve the liberalization of power generation, transmission, and distribution at the state level, represents a major shift in policy direction leading to many states attempting the generation, transmission and distribution of electricity in Nigeria.
The Electricity Act, signed into law in 2023, decentralized the power sector. States are now empowered to generate, transmit, and distribute electricity independently, whileprivate organizations and individuals are encouraged to invest in mini-grids and renewable energy projects.This legal framework addresses one of the biggest bottlenecks in thesector: over-reliance on the federal grid. By enabling states to develop their own electricity systems, the act opens the door for tailored solutions that reflect local needs and capacities.
Tinubu’s administration has signaled a commitment to sustaining Buhari’s liberalization efforts. Unlikepast policies that heavily relied on federal interventions, Tinubu’s reforms emphasize market-driven solutions. This approach aligns withglobal best practices, where private-sector participation drives innovation, efficiency, and competitiveness.
Furthermore, the Tinubu administration faces the monumental task of addressing theinfrastructure deficits that have plagued previous reforms. This includes revamping transmission and distribution networks, whichremain the weakest links in Nigeria’s electricity supply chain. Tinubu has called for increased public-private partnerships (PPPs) to mobilize the funding required to bridge these gaps.
While Buhari laid the groundwork for liberalization by amending the constitution and signing the PIA into law, President Bola Ahmed Tinubu built on the reforms. The Siemens-led PPI, though incomplete, represents a step toward modernizing the power sector. The PIA also created incentives for gasutilization, a critical component of Nigeria’s energy mix.
However, there remains a lot of work to be done. The privatized DisCos and GenCos remainunderperforming, largely due to poor governance and lack ofinvestment. Many initiatives, including the PPI, have beenhampered by delays and bureaucratic inefficiencies. The reliability of power supply remains abysmal, with millions of Nigerians still dependent on generators.
The administration of President Bola Ahmed Tinubu must address the structural flaws in the privatization process by introducing stricter performance benchmarks for DisCos and GenCos, ensuring decentralized Success because while the Electricity Act provides for state-level generation and distribution, states must be equipped with the technical and financial resources to implement these reforms effectively.
Furthermore, President Tinubu must avoid the delays that plagued Buhari’s initiatives by streamlining bureaucratic processes and fostering accountability. It is noteworthy to state that Tinubu’s emphasis on decentralized and market-driven solutions marks a departure from the federal-centric approach of the past. If implemented effectively, his reforms could unlock new investments,foster competition, and deliver tangible improvements in power supply.
However, success hinges on addressing critical challenges, includingfinancing, capacity building, and regulatory oversight.
The Nigerian Electricity Regulatory Commission (NERC) must be empowered to enforce compliance withperformance standards. Transmission and distributionnetworks should be prioritized to reduce technical losses.In this day and age of carbon emissions and environmental concerns the Federal Government of Nigeria must also work to meet up with international expectations by expanding investments in solar, wind, and hydropower projects that can diversify Nigeria’s energy mix and reduce dependence on fossil fuels. States and local governments must develop theexpertise to manage decentralized electricity systems.
The comparison between Buhari’s and Tinubu’s electricity reforms underscores the complexities of Nigeria’s power sector. While Buharilaid a solid foundation with legal reforms and infrastructureprojects, Tinubu’s administration has the opportunity to build on thislegacy by addressing past shortcomings and adopting innovative approaches.
Ultimately, the success of Tinubu’s reforms will depend on their implementation. If the Electricity Act is fully operationalized, decentralized and effectively managed, Nigeria could finallyturn the corner on its electricity challenges.
For ordinary Nigerians, the stakes could not be higher—reliable power is not just an economic necessity but a basic right. The journey to achieving this goal may belong, but with sustained political will and stakeholder collaboration,the vision of a stable and efficient electricity sector can become areality.
