Power sector advocacy: A pause and a review

This opinion piece is meant to be a review of the articles I have done in the last six consecutive weeks on the power sector in this column, beginning with the article published on February 3, 2025, titled “Privatising the Nigerian Power Sector: Reasons President Tinubu Should Act Now.” This was followed by “Mission 300 Africa Energy Summit: A Review,” on February 10, 2025; and then a three-part article, titled “Mission-300: Nigeria’s 5-year energy compact,” published February 17, February 24, and March 3, 2025. Then, last week’s article, titled “Nigeria’s Energy Compact: Looking beyond Mission-300.” Since my debut article in this column on January 15, 2024, titled “The Imperatives of Elevated Economic Discourse,” I have done opinion pieces on diverse areas of the Nigerian economy, on the whole making a strong case for private sector-led, market-facing economic reforms.

But it has recently occurred to me that the most important economic challenge Nigeria faces presently and has indeed faced for quite a long time is not in the foreign exchange market or in the oil and gas sector, as challenging as they have been, but in the power sector. The turnaround and long-term sustainable growth and development of the Nigerian economy depend above and beyond anything else on the resolution of the perennial crisis and failures in the power sector.

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The genesis of the problems and challenges of the Nigerian power sector is closely linked with the political history of Nigeria, beginning with military intervention in Nigerian politics, the emergence of oil and gas as a major revenue earner for the government, which in turn led to prolonged years of military rule. The long and short of it is that the power sector was one of the sectors that took the hardest hit during the extended period of military interregnum due to abject neglect and gross under-investment in plant and equipment. This was to lead to years of deindustrialisation, import-dependency syndrome, and recently the exodus of major manufacturing multinationals from Nigeria.

“The long and short of it is that the power sector was one of the sectors that took the hardest hit during the extended period of military interregnum due to abject neglect and gross under-investment in plant and equipment.”

While commending President Bola Ahmed Tinubu for the gradual turnaround in the Nigerian economy after a period of what I may term ‘heightened crises of economic reform,’ the reality must now dawn on us all that the reforms will only yield limited short- to medium-term success without a critical focus in the form of a paradigm shift in the power sector. But first, we must commend the Tinubu Administration for the policy activism in the power sector since its inception in May 2023, beginning with the Electricity Act 2023 and followed by the “National Energy Compact of the Federal Republic of Nigeria,” unveiled at the recent Africa Energy Summit in Dar Es Salam, Tanzania, and the release over a fortnight ago of two major policy instruments, the “National Integrated Electricity Policy” and the “Nigeria Integrated Resource Plan (NIRP 2024).” Granted that the foregoing three documents are based on international energy sector planning templates done with the assistance of our international development partners working closely with local expertise, the political will of the Federal Government as exemplified by the enormous energy and leadership visibility of the Honourable Minister of Power, Mr. Adebayo Adelabu, in pursuing these major policy documents to approval by the Federal Executive Council and formal public launch is to be highly commended.

My last six consecutive articles on the power sector, which I mentioned above, have sought to focus critical attention on the power sector for the reasons mentioned. First, to commend the Tinubu administration for the great work it is doing in the power sector, but to state that the long-term solution to the perennial challenges and crisis in the Nigerian power sector is the full privatisation of the sector. This essentially means the completion of the privatisation of the power distribution companies (the DisCos), which are still 40 percent public-sector owned; the privatisation of the ten National Integrated Power Plants (NIPPs) under the management of the Niger-Delta Power Holding Company, which can together add a minimum of 3000 megawatts (MW) of power to the national grid; and the privatisation of the Transmission Company of Nigeria (TCN). Without the government developing the political will to relinquish these assets to financially resourceful and technically competent private sector players, the Nigerian power sector will continue to totter and fail to deliver the power the Nigerian economy needs to produce the goods and services for local consumption and for exports and for continental and international competitiveness.

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Notwithstanding the commendable work on and aspirations of the Electricity Act 2023, Nigeria’s Energy Compact, the National Integrated Electricity Policy/Strategic Implementation Plan (NIEP-SIP), and the National Integrated Resource Plan (NIRP 2024), past experience has taught us that not many implementation outcomes are to be expected—a case in point being the over 100 transmission projects abandoned over the years. And then the plan to spend a meagre $192 million to expand the transmission infrastructure between 2024 and 2028, which is a drop in the ocean compared to the billions of dollars needed to transform our power transmission backbone, which can only come from the private sector.

Against the foregoing backdrop, the power sector will remain the primary focus of my policy advocacy opinion pieces for some time, because until there is a paradigm shift to a totally private-sector owned and managed power sector in Nigeria like we have in the telecom sector, not much transformative results should be expected in the short to medium term. Elaborate policy tinkering not built around private sector initiatives and leadership can only yield limited incremental results in the Nigerian power sector.

Mr Igbinoba is Team Lead/CEO at ProServe Options Consulting, Lagos