By Ephraim Agbo
When you stand on the balcony of most cities in Nigeria at night, you don’t just hear the city — you hear its power crisis. The drone of hundreds of diesel and petrol generators rises like industrial static, a constant soundtrack of improvisation. That noise is not just an inconvenience; it is the sound of an economy taxed twice — once by official tariffs, and again by the informal “generator economy.”
Nigeria’s power challenge is not new, but it is uniquely costly. Despite its oil wealth, its abundant sunshine, and decades of reforms, the country still has the world’s largest electricity access deficit, with over 86 million people excluded from reliable supply. For a country that describes itself as the “giant of Africa,” this is not just an embarrassment — it is a brake on every measure of social and economic progress.
The Historical Trap: How a Nation Fell Behind
Nigeria’s electricity system was once a symbol of modernity. In the 1970s and 1980s, the National Electric Power Authority (NEPA) supplied relatively stable power to a much smaller population. But as the country’s population exploded — from 56 million in 1970 to over 220 million today — the grid stagnated.
Investment faltered under military rule; funds earmarked for expansion vanished into corruption. Transmission lines aged, thermal plants broke down, and hydropower was left under-utilized. Liberalisation in the 2000s brought the unbundling of NEPA into GENCOs, DISCOs, and TCN, but privatisation was half-hearted: politically connected buyers acquired assets without sufficient capital to modernise them.
The result is what economists call a “structural deficit” — supply is not just temporarily below demand; it is permanently out of sync. Even as installed capacity climbs to 13,000 MW on paper, only 4,000–6,000 MW actually reaches consumers. Demand, by some estimates, is four times that.
The Political Economy of Darkness
Electricity in Nigeria is not just a technical issue — it is a political currency. Leaders promise “stable light” as a shorthand for development, but delivering it risks angering powerful lobbies.
- Fuel importers benefit from the generator economy. Diesel and petrol sales thrive when the grid fails.
- Politicians often distribute transformers or solar kits as constituency projects — short-term palliatives that rarely build systemic reliability.
- Regulators hesitate to enforce true cost-reflective tariffs, fearing backlash in a society where many live below the poverty line.
The outcome is a vicious cycle: low tariffs lead to revenue shortfalls, which prevent investment, which keeps supply weak, which forces people back onto generators, which strengthens the diesel economy, which pressures government not to disrupt the status quo.
This cycle is why the April 2025 claim by Power Minister Adebayo Adelabu — that 150 million Nigerians now enjoy “adequate electricity” — rang hollow. Adequacy is meaningless if even the connected endure daily blackouts and if Band-A users, paying premium tariffs, sometimes receive less supply than Band-C customers.
The Social Cost of Unreliability
When analysts describe electricity as “infrastructure,” they understate its role. In Nigeria, unreliable electricity is a social determinant of health, education, and inequality:
- In hospitals, ventilators and operating theatres are hostage to diesel. In small clinics, surgeries are postponed when fuel runs out. The result: avoidable deaths.
- In schools, students prepare for exams by torchlight or kerosene lanterns, falling behind global peers.
- For small businesses, electricity costs eat profit margins alive — the World Bank estimates Nigerian firms lose about $29 billion annually to power shortages.
This is why the national grid’s collapse in September 2025 was not just a technical fault — it was a systemic wound, felt in every household and business that depends on predictable power.
Solar and the New Frontier: Escaping the Grid’s Prison
Yet Nigeria is not without hope. The rise of solar mini-grids and home systems represents both a technological leapfrog and a quiet rebellion against the failures of the centralised grid.
In rural communities, residents willingly pay for mini-grid connections, often with remarkable discipline, because the alternative is perpetual darkness. For them, the value of reliable power outweighs the price. In peri-urban Lagos and Abuja, wealthier households invest in rooftop panels and lithium batteries, treating solar not as a luxury but as insurance.
But the solar revolution faces structural barriers:
- Panels and batteries are almost entirely imported, making costs vulnerable to currency devaluation.
- Financing is scarce for the poor; pay-as-you-go systems exist but remain limited in reach.
- Policy uncertainty and customs bottlenecks delay deployment.
Still, the logic is irresistible: Nigeria’s greatest curse (sun-drenched blackouts) could become its greatest asset (sun-powered independence).
Decentralisation: The Electricity Act 2023 and the Federal Dilemma
The Electricity Act of 2023 is Nigeria’s boldest legal reform in decades. By allowing states to create their own electricity markets, it acknowledges what people already know: a one-size-fits-all national grid cannot serve a country of 36 states with different needs, resources, and security challenges.
Early adopters — about a dozen states — are exploring independent power policies, from embedded generation to local distribution companies. The gamble is that decentralisation will encourage competition, innovation, and accountability.
But this raises hard questions:
- Will richer states like Lagos and Rivers advance while poorer northern states fall further behind?
- Can state regulators resist the same patronage and vested interests that crippled the federal system?
- What happens if decentralisation fragments rather than strengthens national coherence?
The Act is an opportunity — but also a test of governance capacity across Nigeria’s federal structure.
The Path Forward: What Nigeria Must Do
Nigeria’s power crisis is not insoluble. Other nations — India, Vietnam, Brazil — have faced similar deficits and made rapid gains through bold reforms, massive investment, and renewable integration. For Nigeria, three analytical imperatives stand out:
-
Break the Generator Economy’s Grip
Government must disincentivise diesel dependence through cleaner alternatives and targeted taxation, while scaling subsidies for renewables. The political cost will be high, but the long-term economic drag of generators is unsustainable. -
Redesign Tariffs with Equity and Honesty
Pretending electricity can be cheap for all is fantasy. Tariffs must reflect cost, but with lifeline subsidies for the poorest and smart cross-subsidisation. Transparency — not populism — is the currency of reform. -
Invest in Transmission and Local Manufacturing
Nigeria cannot import its way to energy independence. Local assembly of solar panels and batteries must be incentivised, and transmission lines must be hardened against vandalism and under-capacity. -
Treat Electricity as Nation-Building, Not a Campaign Slogan
Every kilowatt delivered is not just power — it is GDP growth, jobs, literacy, and health. Politicians must shift from seeing electricity as a vote-catching promise to recognising it as the foundation of state legitimacy.
Final Take: From “Up NEPA!” to Energy Dignity
In the early 2000s, whenever power returned, children across Nigerian neighbourhoods shouted in unison: “Up NEPA!” It was a moment of joy, relief, and collective release. But behind that cry was also resignation — an acceptance that electricity was a fleeting gift, not a right.
Today, that cry still echoes. But if Nigeria is to claim its place as a 21st-century economy, the chant must evolve — from relief at temporary light to confidence in permanent, reliable, affordable power.
The paradox is stark: Nigeria has the sun, the gas, the people, and the potential. What it lacks is not capacity but political will and systemic honesty. Until those align, the generators will roar, the candles will burn, and millions will remain trapped in the dark.
The real test is not whether Nigeria can generate electricity — it can — but whether it can generate the governance, investment, and discipline needed to keep the lights on.
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