13 years post-privatization, Nigeria's power fails—firms spent ₦1.5 trillion on generators
Thirteen years after the Federal Government handed generation and distribution companies to private owners on November 1, 2013, Nigeria's power sector reform has failed. Installed capacity exceeds 13,000 megawatts, yet available generation hovers at 4,000–5,000 megawatts—roughly pre-privatization levels. The national grid collapsed twice in five days in January 2026 alone. Manufacturers spent over ₦1.5 trillion on alternative energy in 2025, while diesel-generated electricity costs ₦950/kWh and petrol ₦750/kWh versus ₦209 for Band A grid customers. When the grid fails, Nigerians pay three to four times more, costs passed on in bread, cement, and transport prices.
Four structural failures drive the crisis: investors bought undercapitalized, heavily leveraged assets with limited utility experience; distribution companies collected only ₦205 billion of ₦268 billion billed in January 2026, leaving generation companies owed ₦7.66 trillion by June 2026; tariffs remain below cost due to political reluctance to raise rates before elections; and regulators have failed to enforce metering, investment, or loss-reduction commitments. Millions remain unmetered and billed by estimate, breeding distrust and non-payment.
The Electricity Act 2023 allows states to regulate their own markets—a pathway for embedded generation and mini-grids to bypass the collapsed national grid. The Vice President has urged states to act. Meanwhile, transmission needs sustained investment and independent management; the grid has collapsed over 120 times in eleven years.
An honest audit of every privatized company against its commitments is overdue. Operators that cannot recapitalize should sell to those who can. The government must fund any subsidy for vulnerable households openly and on time—unfunded subsidies guarantee blackouts. Metering must be completed to end estimated billing.
With available generation declining 15% in five years and manufacturers bleeding ₦1.5 trillion annually, will states seize the Electricity Act to build working local grids, or will another decade pass on generator power?