NIGERIA’S power crisis has become a cruel national joke. A country rich in gas, sunlight, river systems and human capital cannot keep its lights on.
Decades after electricity first came to Lagos in 1896, Africa’s largest economy still staggers between 3,000 and 5,000 megawatts on a good day, while 230 million citizens improvise with generators, rechargeable lanterns and resignation. Indeed, those born in the ’60s have lost hope of experiencing stable power in their lifetime.
The latest controversy over electricity debts and the bitter reaction of generation companies to the Federal Government’s settlement proposals once again exposes a sector trapped in denial, half-reforms, and political cowardice.
President Bola Tinubu’s reported approval of N2.8 trillion as the Federal Government’s verified liability to generation companies, against their N6 trillion-plus claim, is both necessary and inadequate.
Necessary, because Nigeria cannot continue writing blank cheques in a sector notorious for opaque billing, weak investment and regulatory capture.
Inadequate, because paying legacy debt without fixing the causes of the debt is like bailing water from a leaking boat while refusing to seal the hole.
The GenCos’ fury at the “slashed” figure, led by the Association of Power Generation Companies, is predictable.
Joy Ogaji, APGC’s CEO, insisted that every kilowatt generated is metered and invoiced, and challenged the Presidency to publish its audit.
That demand is fair. Transparency is non-negotiable. But the GenCos’ moral authority is thin.
Nearly 13 years after privatisation, Nigeria still generates less power than it did at independence-adjusted potential, and the grid collapses with embarrassing regularity.
Between 2010 and 2025, the system reportedly suffered more than 230 partial and total collapses. A market that collapses this often is simply a managed failure.
The causes are well known. Tariffs have long been non-cost-reflective, creating a liquidity black hole.
Distribution companies collect too little, lose too much, and invest too little. GenCos complain, with justification, that gas suppliers cut them off over unpaid bills.
At the same time, the Transmission Company of Nigeria struggles with an antiquated, radial grid that cannot wheel more than about 5,000MW without tripping.
Aggregate Technical, Commercial and Collection losses, driven by ageing infrastructure, energy theft, poor billing and payment non-compliance, were estimated at $1 billion in 2024, with over N200 billion lost in the first quarter of 2025 alone. NERC data put these losses at roughly 50 per cent.
Regulators oscillate between timidity and political interference. The result is a vicious cycle: low tariffs create debt; debt starves investment; poor infrastructure causes outages; outages fuel public resistance to tariff reform.
Yet Nigeria’s tragedy is not just technical. It is political. No administration wants to tell citizens the truth: that reliable power costs money, and that subsidies without accountability enrich inefficiency.
As energy expert Odion Omonfoman warns, extinguishing legacy debt while allowing non-cost-reflective tariffs to persist merely creates new debt.
By some estimates, sector liabilities were growing by about N200 billion monthly before partial tariff adjustments. That is fiscal arson.
The Bola Tinubu administration deserves credit for insisting on an audit and for tying payments to conditions, including settling gas debts and reinvesting in infrastructure.
For too long, operators collected revenue without reinvesting, leaving communities to buy transformers for private companies.
That absurdity must end. If telecom operators can finance and maintain their base stations, electricity distributors should do no less. Performance-based regulation, not perpetual bailout, must be the rule.
But the government cannot pretend it is an innocent bystander. The Federal Government retains roughly 40 per cent equity in DisCos. That stake is leverage, not decoration.
It should be used to enforce capital expenditure, metering rollouts and service quality, or to trigger licence reviews where operators consistently underperform. A shareholder that cannot influence performance has no business holding shares.
Regulation is another weak link. The NERC must be insulated from political pressure and empowered to set fair, transparent tariffs that balance consumer protection with investor viability.
“Fair” does not mean artificially cheap; it means efficient costs, targeted subsidies for the vulnerable, and zero tolerance for estimated billing. Mass metering is not optional; it is the foundation of trust in the market.
It gives some comfort that the 2023 Electricity Act has opened the door for state-level electricity markets. This decentralisation could be the most consequential reform in decades if executed properly.
States such as Lagos, Oyo, Enugu and Edo are establishing regulators and courting private investment.
Done right, subnational markets can diversify supply, reduce dependence on the fragile national grid, and tailor solutions to local demand, such as gas-fired plants in industrial corridors or solar mini-grids in rural communities.
Aba Power’s integrated generation-distribution model in Abia offers a glimpse of what is possible when responsibility is local and incentives are aligned.
Nigeria does not need to reinvent the wheel. Other African countries have shown what political will and coherent planning can achieve.
Egypt transformed chronic shortages into surpluses within a decade by investing aggressively in generation and transmission, partnering credibly with firms such as Siemens, and enforcing discipline across the value chain.
Ethiopia is betting big on hydropower to anchor industrialisation. South Africa, despite Eskom’s troubles, still generates multiples of Nigeria’s output because it treats power as strategic infrastructure, not a political favour.
Nigeria’s comparative shame is stark. With about 210 trillion cubic feet of gas reserves and abundant sunshine, the country should be exporting electricity, not excuses.
Instead, Nigerians reportedly spend up to N10 trillion annually on fuel for generators. This “shadow grid” that accounts for between 14 and 20 gigawatts of power is dirtier, costlier, and wildly inefficient.
The implications are that manufacturers bleed productivity, MSMEs collapse under diesel costs, and households pay more for darkness than they would for light.
Nothing symbolises this disconnect more than the reported N10 billion solar project at Aso Rock Villa, effectively insulating the Presidency from the chaos endured by ordinary Nigerians.
Leaders everywhere seek reliable power; only in Nigeria does that quest become a metaphor for elite withdrawal. If the centre of power must go solar to function, what does that say about confidence in the national grid?
This is why electricity is not just a policy challenge; it is a legacy issue. If President Tinubu leaves office without resolving Nigeria’s power crisis, history will be unforgiving.
Roads can be rebuilt, reforms can be tweaked, but without power, industrialisation is just a slogan. The ambition of a $1 trillion economy by 2030 will remain a fantasy if factories cannot run and students cannot study at home after dark.
The way forward is clear, even if politically uncomfortable. First, the GenCos’ audit must be published, and the settlement must be concluded transparently. Pay what is owed, not what is claimed.
Then the bleeding has to stop by implementing cost-reflective tariffs with targeted subsidies, not blanket distortions. Also, DisCos must be compelled to invest in last-mile infrastructure and metering, using federal equity and regulatory sanctions where necessary.
Crucially, the national grid must be decentralised into resilient regional clusters with modern control systems, spinning reserves and redundancy, while state electricity markets should be accelerated to diversify supply and attract capital.
Nigeria has debated power for half a century. The arguments are exhausted, and the excuses are impertinent. What remains is action.
Until electricity becomes reliable, affordable and universal, every generator humming in the night is an indictment, and every solar panel at the Villa is a reminder that the country’s leaders have chosen light for themselves and darkness for the rest.
