Nigeria shifts power focus from ownership fights to grid governance after 30-year market experiment fails
Nigeria is correcting its power sector course by ending NBET’s monopoly as buyer of last resort and pushing bilateral contracts between generators and users under the 2023 Electricity Act. Minister Joseph Tegbe and NERC have already implemented April 2024’s Band A tariff realignment, moving high-supply customers to near-cost-reflective prices—the first such shift in a generation. The core lesson from three decades of failed reforms: markets only work when institutions prepare them, as seen in Odisha’s privatization disaster versus Andhra Pradesh’s governance-focused turnaround.
Two traps threaten current progress. First, industrial giants like Dangote may flee the grid for self-generation without paying fair transmission costs, triggering a utility death spiral where DisCos serve only non-paying households. Second, following the US Susquehanna precedent, large users contracting directly with GenCos must pay wheeling fees to TCN for grid use and standby charges when their own generators fail—costs that cannot be passed to ordinary consumers. Without these, grid defection bankrupts DisCos.
The non-negotiable fix is upgrading TCN: unbundling it into Transmission Service Provider and Independent System Operator, conducting Tegbe’s audit before new lines, and implementing feeder metering for commercial discipline. Only then can Nigeria pursue a liquid spot market where power moves freely across regions. Will fair wheeling and standby charges convince industries to return to the grid, or will they double down on self-generation, leaving DisCos with unsustainable loads?