WEDNESDAY COLUMN BY USSIJU MEDANER
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The persistent challenge of erratic power supply in Nigeria has long hampered national development, undermining economic growth and frustrating industrial progress. For decades, centralised control, poor regulation, and infrastructural decay have stalled meaningful reform in the Nigerian Electricity Supply Industry (NESI). But recent developments in Nigeria’s legislative and constitutional landscape signal a turning point.
With the enactment of the Fifth Alteration (No. 33) Bill 2022, signed by former President Muhammadu Buhari, and the Electricity Act 2023, assented to by President Bola Ahmed Tinubu, Nigeria has taken significant steps toward the decentralisation and liberalisation of its power sector. For the first time in the country’s history, states are constitutionally empowered to generate, transmit, and distribute electricity in areas covered by the national grid. This effectively ends the longstanding monopoly of the Federal Government and offers a path toward a more resilient and competitive electricity market.
To fully harness the benefits of this transition, states must now act with urgency and clarity. The first step is for each state to enact its own electricity legislation that aligns with the new federal framework. These laws must establish independent state electricity regulatory bodies with the mandate to issue licences, set standards, and oversee electricity operations across the state. Such institutions must ensure not just investor confidence but also consumer protection and service efficiency.
However, with this new regulatory autonomy comes the risk of overregulation and bureaucratic conflict. The overlap between federal and state jurisdictions, particularly where the national grid is concerned, could create multiple licensing regimes and increase compliance costs for operators. States must therefore prioritise structured collaboration with the Nigerian Electricity Regulatory Commission (NERC) to prevent duplication and harmonise regulatory processes.
Existing contracts in the NESI also pose another layer of complexity. Many agreements entered into under the previous framework include “Change in Law” clauses that may be triggered by these constitutional and legislative reforms. States must conduct a detailed review of such contracts and engage legal experts to avoid triggering disputes or claims that could deter investment.
Electricity tariff reform is another key consideration. Current pricing models in Nigeria are plagued by inefficiencies and public distrust. States must move towards cost-reflective yet affordable tariffs, guided by market forces and transparent methodologies. An effective pricing structure will ensure the financial sustainability of electricity projects while protecting consumers from exploitative rates.
Infrastructure development must also keep pace with regulatory change. States should actively invest in building their own independent electricity grids and encourage the growth of mini-grid systems, particularly in underserved and rural areas. These decentralised grids are less prone to failure, easier to maintain, and more responsive to local demand. Their development will significantly reduce pressure on the overburdened national grid and mitigate the frequent collapses that have plagued Nigeria’s power supply.
Looking inward, states must become aggressive in identifying and unlocking domestic sources of capital and expertise. Local banks, pension funds, and private equity firms should be incentivised through clear risk mitigation frameworks to invest in the power value chain. States must also explore Public-Private Partnerships (PPPs) as a viable model for financing infrastructure upgrades, leveraging private sector efficiency while retaining public interest oversight.
Equally important is the localisation of manufacturing and servicing of modern power equipment. State governments can create special industrial zones and offer tax incentives to local manufacturers and assemblers of transformers, switchgears, inverters, smart meters, and renewable energy components. This will not only drive down equipment costs but also create skilled jobs and build long-term capacity for maintenance and innovation.
States must also prioritise modernisation of their transmission and distribution networks. Outdated infrastructure remains one of the leading causes of energy losses in Nigeria. With today’s technological advancements, states can adopt smart grid systems that utilise digital meters, automated fault detection, remote load management, and AI-driven consumption analytics. These tools allow for real-time monitoring, predictive maintenance, and efficient energy dispatching—essential elements for a 21st-century electricity market.
Renewable energy represents the most viable path for sustainable, inclusive, and scalable electricity access. Nigeria’s geographic and climatic diversity offers states the opportunity to tailor renewable strategies to local realities—be it solar in the north, wind in the coastlines, hydro in the middle belt, or biogas in agricultural belts. States must enact specific clean energy investment laws that reduce bureaucratic delays, protect intellectual property, and offer robust guarantees to local and foreign investors.
To catalyse this shift, states must also establish Renewable Energy Investment Promotion Desks within their energy ministries or state investment promotion agencies. These desks should serve as one-stop hubs to facilitate licensing, land acquisition, financing advice, and grid interconnection for renewable energy developers. In parallel, community energy cooperatives should be encouraged to promote inclusivity, especially in off-grid areas.
Education and human capital development are indispensable. States must collaborate with universities, polytechnics, and vocational institutions to create tailored energy education programs. Whether it is training solar technicians, smart meter engineers, or grid operation analysts, building a local skills base is critical for sustaining the energy revolution.
To navigate the complexity of these reforms and implement effective policy, states must engage seasoned consultants with expertise in energy regulation, infrastructure planning, and legal drafting. These consultants will guide the development of state electricity bills, provide technical advice to executive councils and state assemblies, and ensure that new laws and structures are both compliant and investor-friendly.
Ultimately, the reforms introduced by the Electricity Constitutional Amendment and the Electricity Act 2023 provide a historic opportunity to correct the course of Nigeria’s power sector. They present a blueprint for each state to become a hub of energy production and distribution, tailored to its unique resources and economic needs. But opportunity alone is not enough. Action is required—deliberate, strategic, and forward-thinking action by state governments willing to lead from the front.
The path to steady, reliable electricity in Nigeria no longer lies solely in Abuja. It now rests in the corridors of state power houses, in the resolve of governors and legislators, and in the hands of communities and investors ready to build a new energy future. If states rise to this challenge with the vision it demands, Nigeria may finally escape the darkness that has long defined its power story—and step boldly into a future powered by local solutions, modern infrastructure, and the renewable promise of tomorrow.
Power now lies not just in the grid—but in the vision and action of every state.
