By Magnus Onyibe
The Way Forward for Nigeria
Nigeria can no longer afford to lag in electricity reform. The success stories of China and India prove that targeted policies, infrastructure investments and strong regulatory frameworks can turn an electricity-deficient nation into an industrial powerhouse. If Nigeria adopts a similar approach – prioritizing electrification in national development plans, streamlining regulatory frameworks, and attracting serious investors – it can finally break free from its chronic power shortages and achieve long-overdue industrialization.
Nigeria has much to learn from both China and India, particularly the latter, which successfully leveraged World Bank funding to address its electricity challenges – something Nigeria has attempted but with less commitment.
A closer examination of Nigeria’s energy crisis reveals a troubling reality. Despite the country’s numerous political and administrative reforms over the years, the electricity sector has remained largely unchanged since colonial times. While Nigeria has evolved from its amalgamation in 1914 to independence in 1960 and has since expanded from three regions to thirty-six states, its electricity infrastructure remains centralized and outdated.
The stagnation is evident in the persistent lack of investment in critical areas, particularly transmission. Given this reality, it is unrealistic for Nigerians to expect stable and adequate power supply when the sector remains underfunded and structurally inefficient. For instance, the Minister of Power, Adebayo Adelabu, recently revealed that power generation companies (GENCOs) are owed approximately 350 billion naira. This financial strain threatens the viability of the sector, which depends on consistent investment to sustain operations and generate returns for private investors. Many of these investors rely on bank loans, and if they default, it could trigger a broader financial crisis with severe economic consequences.
The challenges extend to the distribution companies (DISCOs), where workers face significant risks while delivering electricity to end users. A recent case in Lagos saw officers from the Nigerian Air Force storming Ikeja Electricity Distribution Company’s premises after the company disconnected power to the air force base due to an unpaid 4 billion naira debt. This reflects a broader problem, as many government agencies and military installations across the country regularly default on their electricity bills. Even the Aso Rock Presidential Villa and several state governments have been threatened with disconnection due to outstanding payments.
The persistent non-payment culture stems from an outdated mindset in the public sector, where officials still view electricity as a government-provided service rather than a privatized utility that requires payment. The 2013 privatization of the power sector failed to address this issue, leading to ongoing financial distress and operational inefficiencies.
Addressing these challenges requires significant structural reforms. Unlike generation and distribution, which are privately owned, the Transmission Company of Nigeria (TCN) remains government-controlled. This presents an opportunity for privatization, allowing for a more integrated and efficient electricity supply chain. Furthermore, of the 11 DISCOs operating in Nigeria, only three are financially viable, while the remaining eight have effectively been taken over by the government. A logical next step would be to merge the viable DISCOs with strong GENCOs and allow them to acquire transmission infrastructure in their respective zones, creating a model similar to those in advanced economies.
This restructuring will be difficult but necessary. As the saying goes, “No pain, no gain.” To succeed, Nigeria’s leadership must embrace bold reforms. Sheikh Mohammed Bin Rashid Al Maktoum once said, “An easy life doesn’t make men, nor does it build nations. Challenges make men, and it these men who build nations.” Nigeria’s energy crisis demands decisive action.
President Bola Tinubu should take inspiration from the transformative approaches of China and India by declaring a state of emergency in the electricity sector. These countries recognized that reliable power was the foundation of industrial growth and took radical steps to achieve it.
As Ernest Hemingway put it, “Go all the way with it. Do not back off. For once, go all the way with what matters.” For Nigeria, nothing matters more at this moment than ensuring abundant electricity supply – because without it, the nation’s industrial ambitions will remain unfulfilled.
Magnus Onyibe, an entrepreneur, public policy analyst, author, democracy advocate, development strategist, alumnus of the Fletcher School of Law and Diplomacy, Tufts University, Massachusetts, USA, and a former commissioner in the Delta State government, sent this piece from Lagos, Nigeria. To continue with this conversation and more, please visit www.magnum.ng
