Nigeria’s electricity sector reforms will struggle to succeed without clearer regulations and stronger alignment between federal and state authorities, according to a new report by PricewaterhouseCoopers.
In its report titled “Priority actions for the successful evolution of Nigeria’s multi-tier electricity market,” PwC warned that regulatory uncertainty and overlapping mandates could undermine the country’s transition to a decentralised power system.
The firm noted that as states take on greater control over intra-state electricity markets, conflicts with federal institutions are inevitable unless clearly defined rules are established.
“Where transition arrangements are unclear or inconsistent, uncertainty rises for utilities, investors and consumers,” the report stated.
PwC emphasised that well-defined boundaries and coordinated governance are essential to building investor confidence and ensuring a stable reform process.
Beyond regulatory issues, the report highlighted persistent structural weaknesses in Nigeria’s power sector, particularly in distribution.
Key concerns include:
- Ongoing liquidity constraints affecting distribution companies
- Legacy debts and metering gaps
- Ageing infrastructure limiting reliability
- Weak data systems affecting billing and collections
PwC said these issues continue to weigh on efficiency and investment outcomes, warning that decentralisation alone will not resolve them.
Nigeria’s electricity reforms gained momentum after President Bola Ahmed Tinubu signed the Electricity Act 2023, which decentralised the sector and empowered states and private players to generate and distribute electricity.
The law aims to boost competition, attract investment, and expand access to power across the country.
However, financial pressures persist. Distribution companies are currently required by the Nigerian Electricity Regulatory Commission to refund over N20 billion to customers under the Meter Asset Provider scheme.
With the Federal Government also planning to share subsidy costs with states from 2026, analysts say coordinated policy execution will be crucial to avoid further strain on the sector.
PwC concluded that without regulatory clarity, strong data systems, and aligned governance, Nigeria’s ambitious electricity reforms risk falling short of expectations.
