N7 trillion, four presidents, Nigeria still in darkness

The federal government is estimated to have spent over N7 trillion on the power sector since 2013, when it privatized it to improve electricity supply in Nigeria.

Despite the huge spending, however, Nigeria is still not close to having regular and steady power supply.

Twice within the first month of 2026, major cities in the country were thrown into blackout due to the loss of electricity supply from the national grid.

In the previous administrations, power generation at a time, dropped to as low as 1,800 megawatts, while transmission and distribution channels were also beset with serious challenges due to obsolete equipment.

While Nigeria’s power woes predate 1999, the return of democracy had brought hope that the sector would be rejuvenated when liberalised for private investors to pump in money to provide electricity for its huge population.

It was in the bid to inject life into the sector that the Electric Power Sector Reform Act in 2005 that set the stage for the introduction of transitional arrangements was enacted. This saw to the transformation of NEPA into the Power Holding Company of Nigeria (PHCN) composed of 18 new successor companies.

The 18 companies are made up of six generation companies, one transmission and 11 distribution companies.

In 2013, however, the PHCN ceased to exist as its assets were handed over to private investors who had paid to acquire these companies.

The interventions

All the administrations since 1999 had made reviving the power sector a cardinal of their reforms. This is because power is said to be critical to the growth of the economy.

The first minister of power during the Olusegun Obasanjo administration, Chief Bola Ige, even promised to phase out power outages within a short period of time.

During his stint between 1999 and 2000, Bola Ige it was who pledged to make “power failure a thing of the past” within six months and to brief Nigerians regularly on progress.

But not only was the Obasanjo administration under which he served unable to achieve the aim, things got worse with frequent grid collapse.

The administration moved towards revamping the thermal stations which facilities had been vandalised and set out to build new thermal plants to complement generation.

Subsequent administrations took a cue from there.

Goodluck Jonathan, as president, said Nigeria needed about $900 billion to fix her energy sector in 30 years.

President Bola Ahmed Tinubu, during his campaigns ahead of the general elections, also promised to make constant power supply a priority in his administration, stressing that if he failed to achieve that he shouldn’t be voted back in office.

In one of the numerous interventions, the Central Bank of Nigeria (CBN) made available a N213 billion facility out of the N701 billion payment assurance guarantee obtained.

The administration of Muhammadu Buhari took more than $6 billion loans to improve power supply and upgrade infrastructure on the transmission network.

There’s also the 2018 Siemens power deal that was supposed to expand the grid to 25,000MW by 2025, which is yet to realise a quarter of the target despite the project estimated to cost Nigeria $2.3 billion.

Despite the failures of these loans the current administration is supervising another $500 million Nigeria Distribution Sector Recovery Program (DISREP), a World Bank-supported initiative designed to improve the technical and financial performance of Nigeria’s electricity distribution companies (DisCos) to provide meters to electricity customers and help DisCos to improve their networks.

The electricity Generation Companies (GenCos) are currently demanding payment of over N4 trillion debt from the government which it said is money owed for subsidy and payment of debt promised when privatisation took place.

Promises by different ministers

Dr Segun Agagu succeeded Ige in 2000, still under President Obasanjo. He pledged to expand generation capacity, strengthen transmission infrastructure and lay the groundwork for long-term sector reforms. However, the absence of a clear reform framework at the time, coupled with poor implementation and continued reliance on obsolete power plants, meant that the promised improvements failed to materialise.

In 2002, Dr Olu Agunloye was appointed Minister of Power and Steel by President Obasanjo. His tenure was marked by ambitious plans to fast-track major hydroelectric projects, particularly the Mambilla Hydropower Project, and to significantly expand national generation capacity. Those ambitions collapsed amid procedural irregularities and weak coordination within government. Years after leaving office, Agunloye became one of the most prominent former power ministers to face alleged corruption charges. He was accused of unlawfully awarding a $6 billion Mambilla contract without proper approvals. The case is currently before the courts, with trial still ongoing.

Senator Liyel Imoke took over the power portfolio in 2003, also under Obasanjo, serving until 2007. His tenure coincided with the launch of the National Integrated Power Projects, designed to rapidly increase electricity generation through emergency power plants. While the initiative raised hopes, it soon became mired in delays, cost overruns and weak oversight.

With the inauguration of President Umaru Musa Yar’Adua in 2007, Rilwan Lanre Babalola was appointed Minister of Power. He promised to raise electricity generation to about 6,000 megawatts and even suggested Nigeria could enjoy near 24-hour power supply by 2009. Instead, generation stagnated. Gas supply shortages, poor maintenance of existing plants and inadequate transmission infrastructure combined to frustrate delivery.

Under President Goodluck Jonathan, Professor Barth Nnaji was appointed power minister in 2011 and became the face of Nigeria’s power sector privatisation. He assured Nigerians that unbundling the Power Holding Company of Nigeria and handing assets to private operators would deliver stable electricity. However, the privatisation process was widely criticised as rushed and poorly regulated.

Professor Chinedu Nebo, appointed by Jonathan in 2013, inherited a privatised but deeply fragile power sector. He promised to consolidate the gains of privatisation and improve electricity supply nationwide. Instead, under-capitalised distribution companies, weak regulation, tariff disputes and a persistent liquidity crisis crippled progress.

The election of President Muhammadu Buhari in 2015 brought Babatunde Raji Fashola to the power ministry. Fashola promised to fix transmission bottlenecks, reduce grid collapses and gradually improve electricity availability. While some transmission projects were completed, the sector continued to suffer from frequent grid failures, gas constraints and unresolved tariff challenges.

In 2019, Saleh Mamman was appointed Minister of Power by President Buhari, with a renewed focus on completing major hydroelectric projects such as Mambilla and Zungeru. His tenure ended in controversy. Investigators later accused him of diverting about N33.8 billion linked to power projects. He has since been arrested and arraigned by the Economic and Financial Crimes Commission, and his trial is ongoing.

Mamman was succeeded in 2021 by Abubakar Aliyu, also under Buhari. Aliyu pledged to stabilise power supply and address longstanding weaknesses in generation and transmission. However, entrenched structural problems and a deepening liquidity crisis in the sector limited tangible progress. He left office in 2023 without facing any corruption charges.

The current Minister of Power, Adebayo Adelabu, was appointed by President Bola Ahmed Tinubu in 2023. He has promised to significantly expand generation, reform electricity tariffs and improve grid reliability. His tenure is still unfolding, and while civil society groups have called for greater transparency in the sector, no criminal allegations have been formally sustained against him.

Problems in the sector

The president of Nigeria Consumer Protection Network, Kunle Olubiyo, said one of the problems is the fact that Nigeria didn’t do complete privatisation of the entire value chain. While speaking with Weekend Trust, he said that was the beginning of the problem in the sector.

Olubiyo, a renowned industry expert, who served in the National Technical Investigative Panel on Power System Collapses/System Stability and Reliability (June 2013) said after privatisation, whatever that was left was preserved for interest as a cash cow and as a way of putting in money in the budget.

“The federal government and the states hold a 40 per cent stake in all the DisCos that were sold and owns the TCN 100 per cent. This is one of the reasons it continues to pay subsidies as shareholder in these firms through the Bureau of Public Enterprise,” he said.

He compared the sector with the telecommunications that was fully privatised without any monetary support from the government.

“So, our perception is that the public sector fund is a largesse that must be shared, irrespective of the value for money. But, if it is a business, whoever is investing their money, will put in place the machinery of key performance indicator monitoring and evaluation,” he said.

He added that even if an investor puts $1trn in the Nigerian power sector, there will still be the same results due to the corruption that is neck deep in the system.

“If you want it to work, we will do a full privatisation of the sector, allowing the investors that really mean business to come in. Whenever the government is involved in settlement of gas payment or any form of subsidy, it will be over bloated,” he said.

He added that the lack of automation in the value chain to know the amount of electricity transmitted is also part of the reasons Genos have continued to claim the government is owning them N4trn without clear accountability.

“Some of the claims or debts are fictitious and inflated because whenever there is free money, there will be a value chain of people that will smile to the bank,” he said.

He added that the transmission subsector is the weakest in the value chain and is a reflection on why the government should leave the sector entirely.

The Chief Executive Officer (CEO) at Sage Consulting & Communications, Bode Fadipe, on his part said the ineptitude in the sector rose from the external influence on policies issued by the government.

“During privatisation, we allowed some powerful individuals to influence the policy itself. For instance, the metering policy. Since privatisation, we have been moving one step forward and several steps backward. Just that one alone, if we can’t get metering right, then how do we want to succeed with the entire project itself”, he said.

He said the federal government has not demonstrated sufficient political will to deal with the issue of privatisation, thus the liquidity case hanging over the sector.

“We don’t have a clear-cut political will to say we want to charge exactly what the cost of electricity is. It’s either that or there are other subterranean considerations that are difficult for us to understand,” he added.

He also noted that there are some investors that are just playboys in the power sector and use their assets to milk the government.

He said there are some asset owners that ought to have been allowed to die naturally, but the government continues to put them on life support by providing funds, saying the government has spent much more on the power sector than what it is owing the Gencos.

“The Gencos are just crying about N4trn, but the sector has received up to N6trn, if not more since privatisation. If we have the records and patience to do the research, look at what the sector spent before privatisation in 2013. The policy inconsistency is hurting us. The quality of the investors is hurting us.”

He went on to state that the society is also hurting the system due to theft of electricity which many see as their own share of the national cake.

“This is a society where social problems like insecurity have led to the vandalising of critical national assets like towers and that has affected the consistency of power supply in the country. So, there are myriads of problems out there. But one thing is very clear; of all of these problems, the human factor is the biggest, because it is human beings that will make a decision about the liquidity,” he added, saying the corruption in the sector has seen several ministers arraigned in court over alleged embezzlement of funds which were supposed to improve the sector.

Attempts at solutions

While the Nigerian Electricity Regulatory Commission (NERC) is responsible for setting the price of electricity tariff, it has consistently pegged the price below the operation costs of utility companies.

The difference is afterward paid by the federal government as electricity generation cost to the Gencos so the DisCos won’t be paying the entire bill on the supply they receive from the GenCos, Weekend Trust gathered.

But the inflation and forex regime introduced by the administration of President Bola Ahmed Tinubu when he resumed office in 2023, shot the tariff to over N2trn as the government increased the tariff for Band A customers to reduce its cost of subsidy.

Some experts say the government’s failure to fulfill its obligation in subsidy payment had left a pile of debt that the GenCos now say is hovering N6trn. And while the debt continues to accumulate, the government has not provided any funding in the budget to show that it will pay the debt or this year’s subsidy.

They insist that while increasing the tariff for the remaining bands would have been the only way the government could have stopped the accumulation of new debt to the sector, it, however, plans to bring in states and local governments to foot the bills through deduction from the Federal Allocation Committee (FAAC).

Old wine in a new bottle

Analysts say except the transmission subsector that was retained as a government utility company, all the other 17 companies were put in private hands to bring new hope and energy into a sector that has been mired in corruption, inefficiency and obsolete.

But it turned out that the companies could not dust off the old searing problems the sector was facing when it was controlled by the federal government.

From grid collapse to load shedding, investment shortfall to slow expansion of the grid, the power continues to reel under the same seething problems it was known for before privatisation.

They said while there is no gainsaying that the privatisation has brought in investors’ funds with the growth of the grid to 5,000MW from 2,000MW in the 2000s, it is not enough for a sector that has been bailed out on several occasions by the government to the tune of trillions of naira.

While industries and small businesses continue to suffer for the inadequacy of the electricity supply on the grid, the ineptitude of the investors that bought the companies from the government has seen at least five of them taken over by financiers due to their inability to pay back the loans they took.

Experts divided on subsidy payment from FAAC

But experts are divided on whether the new funding arrangement is the way to go for the sector.

For electricity market expert, Lanre Elatuyi, since the federal government has not been able to pay the entire subsidy in the sector to the GenCos, the states should be involved in the payment since the Electricity Act 2023, granted autonomy to states to legislate on the entire electricity value chain.

“It is just a way of finding relief from the burden of subsidy on the part of the FG. The sustainability of this rests on what is going to be agreed between states and the federal government and it may be too early to predict what will happen. If the states agree to allow their portion of subsidy to be removed from FAAC allocation, it is good for the GenCos and it increases the liquidity level in the sector, but it will impact states revenue.

“In the long run, this may spur the quick transition to full competition in the sector and it may also encourage each state to take seriously the opportunities that may be inherent in the Electricity Act 2023,” he said.

Also, an energy expert, Nick Agule, said states and local governments must now take responsibility following the Electricity Act signed into law in 2023.

“I align my views to say that now that the states, through the Electricity Act that was signed in 2023 by President Tinubu, have a responsibility to create electricity markets in their domains, they should also come to the table about this subsidy matter. And it should not only be states, it should be the local governments as well,” he said.

Energy expert and lead consultant on Power to the Nigerian Governors Forum, Odion Omonfoman, said any deduction by the federal government from the Federation Account prior to distribution to states and Local Government Areas (LGAs) expressly violates the explicit provisions of Sections 162, 163, and 166 of the Constitution of the Federal Republic of Nigeria (CFRN) 1999 (as amended).

He said the account belongs to the federation as a whole, not the federal government; therefore, unilateral deductions for FG policy obligations are ultra vires, stressing that accumulated subsidy debt is a direct result of the DisCos’ inability to remit the full value of energy received, caused by high operational losses and commercial inefficiencies of DisCos and tariff shortfalls arising from the regulator (NERC) setting tariffs lower than generation/supply costs.

“Both tariff and market shortfalls represent deliberate policy decisions by the federal government to suppress electricity prices for political or socio-economic reasons. As such, all shortfall payments are the exclusive obligation of the federal government and cannot be transferred to states and LGAs,” he said.

He noted that applying a blanket deduction creates a severe moral hazard and inequity among states as Lagos State accounts for over 40 per cent of energy consumption, while states like Taraba have nine out of 16 LGAs entirely unconnected to the national grid.

“In Bayelsa State, the national grid was virtually non-existent even in the capital until recently. In many states, entire LGAs have been disconnected for decades. The equity question is that is it justifiable for the FAAC allocation of Taraba State (with minimal access) to be deducted to “subsidise” the power consumption of Lagos State?”

Nigerians share experiences when grid collapse

For Ahmad Ibrahim, a resident of Wuse District in Abuja, he took the financial decision to purchase a power bank to ensure his phone is well charged when the grid collapsed on Friday, January 23.

Though the blackout caused by the grid collapse lasted for less than two hours, Ibrahim said it took the whole day for electricity to be restored at his residence.

“I saw the light in my bulb flicker as though it was struggling to come on. We all know that this kind of electricity puts appliances at risk as they could explode or develop faults,” he said.

He added that it was frustrating that electricity, which is very important in socio-economic growth, is still a luxury for millions of citizens.

Sodiq Omolaoye, a tailor in Lugbe, a suburb in Abuja, said the last grid collapse made it impossible for him to meet the deadline in completing customers’ clothes.

Omolaoye said this is due to the area experiencing erratic power supply which was not the case the previous week.

“I could not operate the industrial sewing machine I own as it works with electricity. This means delays and suspicion from my customers because they felt I was lying or not serious about completing the job for them, he said.

For him, exiting the grid is not an option due to the high cost of purchasing a generator as well as fueling. He urged the government to focus on the electricity market as its availability can remove many Nigerians from poverty.

For Soliu Gbademosi, the low supply after the collapse caused him some losses.

“I can’t explain why the supply was bad days after the collapse in my community but it comes at a cost for me. I know the recovery should not have taken this long but the incompetence in the sector is terrible,” he lamented.

He queried why government interventions in the sector have not yielded much success.

“Electricity should be made a fundamental human right as its availability brings different opportunities for citizens,” he said.

What government can do to stop collapse — EX-MD of TCN

Former Managing Director of Transmission Company of Nigeria (TCN), Aliyu Tambuwal, said the government can arrest the situation by providing an atmosphere for the power sector players to be able to contribute.

He said the NISO is saddled with the responsibility of obtaining a spinning reserve, which he said is an instrument that ensures that if there is low generation, there should be some power station reserved that should come on immediately to cushion the effect so that the system is stabilised.

“All these things are supposed to be provided by the government since the Nigerian Independent System Operator and the transmission company are all under government control. On the other hand, generation companies too should be able to expand their generation beyond what they are doing now. And if we have a gas constraint, the government has a responsibility to ensure that we don’t have such a constraint to reduce the generation to a dangerously low level that can cause system collapse.

“We have hydros too and we know this period of the year; we have low levels of water, so you may not rely much on them. So, a lot needs to be done on the thermal systems so that we have generating units that can quickly be started to prevent system collapse, like the spinning reserve aspect”, he said.

He said distribution companies also have a role in ensuring that they maintain the allocation that is given to them.

“If, for example, Abuja is asked to take 500 megawatts and it decides to take 700 megawatts, it means it has gone above the allocated load and that can destabilise the system and cause system collapse. So, there has to be great discipline by all participants to ensure that the grid is not thrown into this kind of tragedy as we are witnessing,” he added.

Also, a Professor of Energy/Electricity Law & Regulation at the University of Lagos, Prof. Yemi Oke, said Nigeria needs modern-day technologies to stabilise the grid.

“We need digitised monitoring of the grid infrastructure. In this 21st century most countries monitor their grid infrastructure through drones; they get early warning signs. If the grid is going to collapse due to technical fault, if you have appropriate technology in place, you will have noticed some beeps telling you something is happening in a particular feeder to go and correct it, or in a particular transmission infrastructure.

“We advocated extensive off-grid solutions, mini-grid, mobile grid, that will free up the dilapidated grid that we have. The grid infrastructure, the Nigerian grid system, is very old. Just like I always liken it to the pipeline that we have.

“Aside from the challenges of vandalism, there is also sabotage, which is a known factor because we have to be monitoring some transmission infrastructure up north. People cut away all that expensive equipment”, he said.

He added that the world is going off-grid so states need to come  on board to also help in establishing off-grid solutions that Nigerians can rely on.

On his part, Bode Fadipe said the country can allow each region to develop its own power grid, but have a linking point because there is still value in the grid.

“The grid itself is a web. So don’t break them. Let’s say, the North-Central is a region, North-West is a region and North-East is a region, you can link them up so that if North-Central is having a problem, you can cut off North-Central and still feed North-West and North-East, unlike, what occurred two years ago, when the entire 19 Northern states were cut off for two weeks”, he said.

He maintained that constraints on the grid make it hard for it to pump more than 5,000 MW of electricity.

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