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By Alabo Beks Dagogo-Jack
The dismal condition of Nigeria’s power sector remains one of the most topical subjects, yet perhaps the least understood in our national development discourse since the outset of the Fourh Republic in 1999.
While different opinions abound, the majority fall short of capturing a full, well-balanced appreciation of where the sector was in 1999, what was achieved by the different administrations since then and what our nation must do to achieve electricity supply adequacy, reliability and affordability, such as obtains in many countries of comparative wealth and population demographics.
It is, therefore, necessary, from time to time, to set the records straight—not to claim any credit but for clarity, context and a contribution in support of President Bola Tinubu’s efforts to solve the acute electricity supply deficit, which has been a primary hindrance to our national development for decades now.
When President Goodluck Jonathan assumed direct responsibility for the power sector in 2010, Nigeria’s grid power hovered between zero and 1,500 megawatts for a population of roughly 160 million. This translates to about 9 watts of supply per person per day, placing Nigeria among the lowest electricity availability levels globally.
This dismal statistics was our national reality in spite of significant infrastructure investments already made including thermal generation plants like Egbin, Ughelli, Afam, and Geregu ; hydroelectric power plants like Kainji, Jebba, and Shiroro, all of which had lost well over 60 percent of installed capacity due to years of poor maintenance and the typical inefficiencies associated with the performance of SOEs (State-Owned Enterprises) under the vertically integrated state monopoly structure, which operated the national utility. The national grid remained in its most fragile and vulnerable state, leading to multiple incidents of national grid collapses whilst the distribution network across the country was also overwhelmed with obsolete and overstretched infrastructure, all this, in the face of a demand population which grew at around 3.5% per annum over the 1999 baseline figure of 160million.
Average supply penetration ranged between 25-35% for urban centres and much less for the rural population. Our development as a nation became increasingly heavily dependent on self-generation of electricity through diesel-powered generators, which was so pervasive that even small roadside kiosks and barbing salons had no choice than buy small generators, called “I better pass my neighbour” to remain in business.
In effect, Nigeria, before what I term as the Obasanjo-Jonathan Power Sector Reform Agenda was operating one of the most expensive and least efficient electricity supply systems in the world, with the federal government as the sole operator of the vertically integrated monopoly through its SOE, variously known as ECN, NEPA and much later PHCN, to which billions of federal budget got allocated every year but the effective service delivery level remained low and epileptic, year in, year out.
To fully appreciate the pre-Power Reform era supply situation of 1,500Mw, see below the electricity availability on per capita basis across comparable economies:
Arranged in this way, the disparity becomes unmistakable.
At the peak of the power reform, when Nigeria achieved a quantum leap from 9 watts to approximately 30 watts per person in 2012, the country was still operating significantly below peer economies, and this marginal improvement clearly demonstrated what a focused reform plan, coupled with a disciplined execution can produce within a relatively short period.
Now, the more sobering reality lies in the present. Today, despite the passage of time and continued claims of trillions injected into the sector in the name of correcting market liquidity problems, the actual delivered grid power has continued to hover around the 2012 threshold of 5,000Mw, 12 odd years after the Goodluck Jonathan Presidency had handed over the following to his successor:
– a peak grid output of over 5000Mw delivered December 2012 and
maintained well after.
– additional fresh generation capacity of over 4000Mw commissioned by the Niger Delta Power Holding Company,
– stress-tested transmission wheeling capacity threshold of about 6000Mw with over 2000Mw of additional NIPP transmission projects bound for completion by Q4-2015.
– several kilometers of natural gas pipeline network expansion and associated facilities for the Nigerian Gas Company (NGC), an NNPC subsidiary to significantly improve gas availability and transportability to the thermal power stations.
Well over 12 years after the privatization of the sector in 2013 by the Goodluck administration, by which time the power reform programme had successfully delivered a peak grid output of 4800Mw and 300Mw of spinning reserve in December 2012; an installed/available total generation capacity of over 10,000Mw; a stress-tested transmission wheeling capacity of over 6,000Mw, completed rehabilitation of several natural gas processing and pipeline infrastructure projects, the Nigerian Electricity Supply Industry, has not delivered any additional grid capacity to the 2013/14 metrics. In fact, in some metrics, such as the frequency of national grid collapses and average number of supply hours per day, the current situation is far worse, compared to the 2014 situation.
Rather than sustain the progress made up to 2014, the power sector is currently wallowing in a web of mind-boggling market debt, placed at over N6 trillion by March 2026 and growing at an alarming rate of around N200 billion per month.
That this unacceptable and mostly avoidable market collapse situation in the power sector, inherited by President Tinubu, arose from the inexplicable total rejection and abandonment by the Buhari administration, of the Power Sector Reform Roadmap, which was well laid out and being faithfully implemented by the Jonathan administration before the handover.
President Tinubu has been in office for about three years and his administration has shown definite commitment to the power sector through such transformational policy initiatives like the new Electricity Act 2023 which essentially moved the sector from the exclusive legislative list to the concurrent list, giving states the right to develop their own electricity infrastructure and run their market, side by side the federally managed electricity market. Unfortunately, it is my considered opinion that this very laudable policy and the most recent Grid Asset Management Company (GAMCO), a PPP project initiative of sort, will struggle a lot to produce any meaningful results, mainly because over the eight years of the Buhari administration and the almost three years of the current administration, the power sector reform has been allowed to completely derail from the original fundamentals of the reform roadmap, clearly laid out and handed over by the Jonathan administration in 2015.
The most negative impact of the very unfortunate abandonment of the reform roadmap by President Buhari is the fast growing level of unmet market settlement liabilities across the value chain, which the Buhari administration ignored until it spinned the infant Nigerian electricity market out of whack.
Much later, when that administration realised the negative impact of abandoning the reform, it began a much belated firefighting campaign, throwing billions of money into the market and hoping to come out from an already very bad, quicksand kind of situation.
President Tinubu has only two options : Be ready to continue throwing trillions from the federal treasury into the sector in the name of settling spiralling , intractable market liabilities, which is a result of abandoning the power reform roadmap or reset the Nigerian power reform fundamentals and re-launch a new Nigerian Power Sector Reform Journey Roadmap, to bring back renewed public and investor confidence to the sector and re-open the gate for a predominantly private sector-led and run electricity market, with a fully empowered regulator.
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Without the latter option, I believe that it will be extremely difficult to sustain the current dispensation.
It’s a well known fact that Nigeria’s current power supply remains significantly below the threshold required for meaningful industrialization and economic transformation.
At the current per capita supply threshold of 20 watts we are not powering an economy—we are simply managing acute scarcity.
The reform of Nigeria’s power sector did not begin with Jonathan in 2010. The foundation was laid under President Olusegun Obasanjo through the Electric Power Sector Reform Act of 2005, which initiated the unbundling the vertically integrated monopoly called the National Electric Power Authority (NEPA) into eleven successor companies across generation, transmission, and distribution, held under the Power Holding Company of Nigeria (PHCN) in preparation for privatisation. Obasanjo also established the National Integrated Power Project (NIPP) to add approximately 4,775 megawatts of generation capacity and expand transmission, distribution and natural gas infrastructure nationwide.
However, reform, the world over is a very serious process that depends on continuity. Reform is a marathon, not a sprint. Following the transition of government in 2007, the programme experienced a significant pause when President Yar’Adua decided to not only suspend the reform programme but also commissioned a probe into fraud allegations associated with the programme. The NIPP 4775Mw fresh additional power projects were suspended, contractors
abandoned sites and the reform was for all intents and purposes grounded until President Goodluck Jonathan assumed office in 2010.
President Jonathan assumed direct responsibility for the power sector as the minister, which brought a very rare level of political will and ownership behind power reform.
He established two key institutional mechanisms to drive reform.
The first was the Presidential Task Force on Power, which served as the execution engine-room, working directly with all the owners of the milestone deliverables clearly laid out in the Nigeria Power Sector Reform Roadmap, which President Jonathan launched in 2010 to kick off his reform programme.
The second was the Presidential Action Committee on Power, chaired by the President, which met regularly as the Situation Room, to remove any performance bottlenecks and maintain cross-sector alignment across the different ministries connected one way or the other in the execution of any of the reform milestones.
This structure ensured that reform moved beyond policy statements into active, coordinated execution.
Within a relatively short period, significant progress was recorded. Generation capacity increased from approximately 1,500 megawatts to about 4,800 megawatts by December 2012, supported by an additional spinning reserve of 300Mw. This improvement was achieved mainly through the rehabilitation and recovery of degraded capacity from existing generation assets.
At the same time, the NIPP advanced considerably. By Q2-2014, over 70 percent of its planned 4,775 megawatts had been completed and commissioned, pushing available capacity beyond 9,000 megawatts and positioning the sector to exceed 10,000 megawatts shortly thereafter.
The privatization of generation and distribution assets in December 2013 marked a major milestone and took the reform beyond a point of no return.
Conducted through a transparent international process, it transferred operational responsibility to the successful bidders from the private sector. This was reinforced by reaching a negotiated final settlement with the Nigeria Labour Congress (NLC), ensuring a smooth transfer of the privatised assets to the new investors without any labour-related legacy baggage.
To provide a credible risk backstop for the market, as an incentive for attracting sustained private sector interest in the emerging new electricity market, the Nigerian Bulk Electricity Trading Company was established as the broker/guarantor between generation and distribution companies, while the Nigerian Electricity Regulatory Commission (NERC) was strengthened to enforce market rules, set cost-reflective tariff, build discipline in the market and provide regulatory confidence for the infant market.
By Q2-2014, both serious local and international investors had come to embrace the potential viability of the emerging electricity market and by most accounts, the Nigerian power reform programme had successfully established a very credible framework for a market-driven electricity sector, with foreign direct investment vehicles, falling over themselves to come into the market, knowing how huge the Nigerian electricity market is.
Sadly, much of the investment appetite and enthusiasm for the electricity market built up at the end of the Jonathan administration, got wasted over the next eight years of the Buhari administration, which was unable to attract any significant private sector investment inflow into the sector in eight years.
Today, Nigeria still remains one of the largest untapped electricity markets in the world. Demand continues to grow, industries and commercial enterprises continue to bear the cost of self-generation and the continued failure to reset the derailed power reform roadmap and re-launch a new bold Nigerian Power Roadmap remains the greatest threat to any effort to increase the national supply threshold in a sustainable way and I hereby submit to President Tinubu to seriously consider taking this bull by the horns. Re-launch a new wholistic National Power Sector Reform Roadmap, incorporating all of today’s imperatives and opportunities into a plan that can reawaken private sector appetite for the sector. The challenge before this administration is not a lack of political will or knowledge or design. The challenge seems to be an oversight in fully assessing the damage suffered by the reform in the last eight years and subsequently a lack of adequate preparation to embrace the reform
imperatives with the right level of discipline and transparency that can change the messaging to the private sector and bring them back on board. Without a fully re-engaged private sector, I see little prospect for success ahead and I also make bold to hold the view that without a new publicly launched Nigeria Power Reform Roadmap, capable of bringing back the private sector to re-engage, I see no silver lining ahead.
The results from the President Jonathan-led Nigerian power sector reform demonstrates that progress is possible when leadership, policy, and execution get properly aligned. The facts are clear, the lessons are available, and the opportunity remains. What is required now is not reinvention, but renewed commitment to make a real difference. It is my candid opinion that, as we reflect on the power reform journey, we might arrive at a simple but necessary conclusion. That the problem with the challenge to fix our electricity problem is not that our elected leaders in the executive and the legislature are not interested in solving the problem – it is whether they are really willing to seek for and embrace the truth, then get adequate resources to tackle the problem and the discipline to stay the right course irrespective of changes in administration, until the desired result is delivered to the Nigerian people, who elected them.
With our multiple resource blessings as a nation, Nigeria has no business wallowing in darkness for this long. President Tinubu should put an end to this national disgrace and book his place in the annals of our developmental history as a nation.
• Engr. Dagogo-Jack, former chairman, Presidential Task Force on Power
