Despite $10bn Investment, Reforms Nigeria’s Power Sector Still Struggles—NSE

Nearly twenty years after reforms were introduced to liberalise Nigeria’s power sector and increase generation capacity, meaningful progress has remained elusive, according to the Nigerian Society of Engineers.

This view was expressed by former NSE President, Tasiu Gidari-Wudil, during the 29th edition of the NSE October Lecture Series held on Friday in Abuja.

In his keynote address, Gidari-Wudil explained that the reforms, which were intended to attract private investment, widen access, and boost electricity generation, have fallen short of expectations.

He noted that while installed capacity stands at roughly 13,000 megawatts, actual output remains below 50 percent of that figure.

He stressed that the Electric Power Sector Reform Act of 2005, which initiated the process, has yet to yield tangible improvements for Nigerians.

“The sector has failed to deliver the promised transformation nearly two decades after liberalisation. If you ask whether there has been significant progress since 2005, the short answer is no. By now, we should have exceeded 30,000 megawatts, but due to political interference, regulatory lapses, and weak implementation, progress has been far below expectations,” he said.

Gidari-Wudil highlighted persistent challenges such as frequent outages, decaying infrastructure, and economic sabotage, which continue to hinder national development.

He identified gas supply issues, transmission constraints, and inefficiencies across the electricity value chain as major bottlenecks.

“The problems are everywhere, generation, transmission, and distribution. Distribution companies in particular must curb rampant commercial and collection losses, which remain the bane of electricity supply in Nigeria,” he added.

While acknowledging that private sector involvement has brought some accountability, he argued that governance failures and consumer attitudes still impede progress.

“Mismanagement thrives when utilities are under government control, but even private operators have failed to instil accountability.

Consumers also play a role, everyone wants free electricity, but no one dares to leave a petrol station without paying. Until we confront this culture, reforms will not succeed,” he argued.

The lecture, themed ‘Evaluating Nigeria’s Power Sector Reforms: 2005–2023: A Quantitative Analysis of Technical Performance and Regulatory Impact’, examined the unbundling of the National Electric Power Authority, the creation of the Nigerian Electricity Regulatory Commission, and the subsequent privatisation of generation and distribution firms.

Despite investments exceeding $10 billion since privatisation, Gidari-Wudil noted that Nigerians still face daily blackouts, frequent grid failures, and unreliable service.

Transmission losses remain between 8 and 12 percent, while distribution efficiency differs widely across the 11 DisCos, with collection rates sometimes dropping to 30 percent.

He cited policy inconsistencies and political interference as recurring obstacles but identified the 2023 Electricity Act as a potential game changer.

The Act allows states to set up their own regulators 11 have already done so and provides for an independent system operator equipped with IoT tools to monitor real-time energy use.

“We are moving towards a US-style model where every state has its public utilities commission, and even villages can form cooperatives for self-generation,” he said.

Gidari-Wudil called for cost-reflective tariffs, transparent subsidies, and improved stakeholder engagement.

He stressed that NERC should enhance monitoring beyond feeders to individual meters using smart technologies.

“The reforms were ambitious and well-designed, but poor execution and lack of political will slowed them down. The Electricity Act of 2023 offers fresh opportunities, but only faithful implementation will make a difference,” he added.

He urged state regulators to build on NERC’s two decades of experience to avoid repeating past errors.

“The solution is near, and we have the technical know-how in this country. Unfortunately, we don’t have the ears of government. Until political leaders take technical advice seriously, the power sector will continue to struggle,” Gidari-Wudil warned.

In her opening remarks, NSE President Margaret Aina Oguntala said the lecture provides a platform for engineers, policymakers, and industry leaders to address national challenges.

She pledged that the society would present the lecture’s recommendations to government and maintain its engagement to ensure effective reform implementation.

“We expect government to take ownership of these recommendations and to involve Nigerian engineers in delivering practical, homegrown solutions. If that happens, as our guest of honour said, there will indeed be light,” she said.

Also speaking, Sahara Group Managing Director Kola Adeshina represented by the Head of Generation, Godwin Emanuel urged collective responsibility among stakeholders.

“The solution is right here. Engineers play a critical role in generation, transmission, and distribution reforms. We must ask ourselves what contributions we have made. The solution lies in our collective commitment,” he said.

The October Lecture Series, which features insights from past NSE presidents on key economic matters, reinforced the message that genuine power sector reform requires consistent, long-term commitment beyond political cycles.