Reforms in Nigeria’s power sector under President Bola Tinubu’s administration are yielding tangible outcomes, attracting $2 billion in new investment and significantly reducing historic financial burdens, the federal government announced Thursday.
Power Minister Adebayo Adelabu revealed the developments during the inauguration of the Nigeria Electricity Liability Management Company (NELMCO) headquarters in Abuja. He credited policy overhauls, market liberalisation, and institutional strengthening—core pillars of the Renewed Hope Agenda—with stabilising the sector and boosting private sector interest.
A key achievement is the drastic reduction of inherited power sector liabilities. NELMCO cut these from N2.303 trillion to N146.76 billion. Through rigorous verification, the agency also generated over N700 billion in savings for the government and slashed ground rent claims from N644 billion to N41.8 billion. Post-privatisation debts owed by government ministries to distribution companies were reduced by 45%.
These financial improvements are linked to the Electricity Act 2023, which decentralised the market and empowered states. The Act has activated 16 state electricity markets, fostering competition. Complementing this, the first National Integrated Electricity Policy in two decades has improved federal-state coordination.
Operational metrics show modest growth. Generation capacity rose from 13 gigawatts to 14 gigawatts, with a peak output of 5,801.44 megawatts recorded. A major regional milestone was achieved with the successful synchronisation of Nigeria’s grid with neighbouring ECOWAS countries, enabling cross-border electricity trade.
To address the massive metering gap, the Presidential Metering Initiative is underway, backed by N700 billion from the Federal Account Allocation Committee and a $500 million World Bank facility.
The minister reported a 70% increase in sector revenue for 2024, alongside the liability reductions, signalling improving efficiency and cost recovery.
Despite these gains, Adelabu acknowledged persistent public frustration over outages, for which he apologised, attributing them primarily to gas supply constraints and infrastructure strain during peak dry season demand. He assured that efforts were in place to restore stability within weeks.
Analysts note that while recent progress is encouraging, sustained policy consistency, enhanced gas supply, and continued investment remain critical to achieving nationwide reliable power. The reforms aim to build a commercially viable, transparent sector that can drive broader economic growth.
