Business

The president and his power sector burdens explicitly explained

Published

6 months ago

April 21, 2026

Nigeria’s electricity sector remains one of the most critical yet troubled components of its economy. Despite decades of reforms, including the landmark Electricity Act 2023, the country continues to experience erratic power supply, infrastructural decay, and financial instability. This article examines the core problems in Nigeria’s power sector and proposes practical solutions, supported by relevant legal frameworks, vis-à-vis the solemn promise made to the people of Nigeria by President Bola Ahmed Tinubu in the course of his political campaigns. Power generation is the main issue in regard to the socio-economic development of any nation. In Nigeria, however, successive governments have deployed it for political gains, knowing the importance that Nigerians attach to it. Thus, in 2015 when it was canvassing for votes from the electorate, the All Progressive Congress stated as follows:

“INFRASTRUCTURE: APC WILL:

Generate, transmit and distribute from current 5,000 – 6,000 MW to at least 20,000 MV of electricity within four years and increasing to 50,000 MW with a view of achieving 24/7 uninterrupted power supply within ten years, whilst simultaneously ensuring development of sustainable/renewable energy.”

Manifesto of the All Progressive Congress (APC), submitted to the people of Nigeria in the wake of the 2015 general elections.

While seeking the mandate of the people to be voted into office, President Tinubu declared that he will surely and certainly fix the power sector issues which will guaranty stable, functional and efficient electricity supply. During the 2023 presidential campaign in particular, the President made a notable promise regarding the Nigerian power sector, stating that if he fails to provide stable electricity within his first four years, Nigerians should not vote for him for a second term. The statement as monitored from his campaign video, states thus: “If I don’t keep the promise (of providing electricity) and I come for a second time, don’t vote for me,” adding that he would provide “24-hour electricity” and end estimated billing. Eleven years after the APC manifesto and three years after his swearing in, the electricity situation has not fared any better, if not worse. For instance, I have never experienced electricity supply in my hometown since I was born, as we are not connected to the national grid at all. Several towns and villages are like my hometown, locked out of any form of development at all, yet we are classified as oil producing. The impression that our leaders in power have conveyed to us is that it is practically impossible to have stable and permanent power supply; that we don’t have the resources to build the needed energy plants that will meet the needs of all Nigerians; and that we must accept generators as second nature if we must function and survive as a people. Churches, banks, schools, small businesses, factories, government ministries and departments, police stations, the courts and even PHCN itself, all depend on generators. Instead of fulfilling his promise, the President has exited the epileptic national grid to the suffering masses of Nigerians and this has trickled down as the Nigerian Revenue Service has recently announced its exit too. In reality, the President may have forgotten that he made any promise to Nigerians, since Aso Villa is now powered with modern solar technology.

Overview of Nigeria’s Power Sector Crisis

Nigeria’s power sector has long been characterised by inadequate generation, weak transmission networks, and inefficient distribution systems. Although installed capacity exceeds 13,000 MW, actual generation is often far lower due to systemic inefficiencies and constraints. Frequent national grid collapses, blackouts, and dependence on private generators highlight the depth of the crisis. It is very difficult to know what to believe between bogus figures being bandied by the government and the institutions established to manage the power sector.

The Major Problems in the Power Sector

a. Inadequate Generation Capacity

Nigeria generates far less electricity than required for its population of over 200 million people. Structural issues such as gas supply shortages and overreliance on fossil fuels limit output. The system equipment is obsolete and no major investment is imminent to end the rot.

b. Poor Transmission Infrastructure

The transmission network, largely controlled by the government, is outdated and unable to efficiently evacuate generated power. Aging infrastructure contributes to frequent grid failures. What is required is a total overhaul, not selective attention meant to garner acceptability.

c. Inefficient Distribution System

Distribution companies (DisCos) struggle with:

High technical and commercial losses, mostly from government agencies.

Poor metering systems, fueled by corruption and bureaucracy.

Inability to recover costs, as the route for such endeavour are very cumbersome and costly.

This results in unreliable service delivery and revenue shortfalls. While the consumers are shouting blue murder against the DISCOs, the latter is always complaining of frustration by the system.

d. Financial and Liquidity Crisis

It has been alleged that the sector is heavily indebted, with trillions of naira owed to generation companies. This discourages investment and limits expansion. We were, however, informed lately that the President has ordered the payment of all legacy debts connected with the power sector. It is therefore surprising that Nigeria is currently experiencing the worst in electricity supply after the financial liquidity issue has been addressed.

e. Regulatory and Policy Challenges

Prior to recent reforms, the legal framework—primarily the Electric Power Sector Reform Act 2005—was insufficient to address evolving sector challenges, including decentralisation and renewable integration. This led to several suggestions for an amendment of the said Act which was indeed accomplished in 2023. But that has not changed anything.

f. Vandalism and Energy Theft

Pipeline vandalism, electricity theft, and sabotage of infrastructure further weaken the system and increase operational costs.

3. Legal Framework Governing the Power Sector

a. Electricity Act 2023

The Electricity Act 2023 is the most comprehensive reform in Nigeria’s electricity sector. It repealed the 2005 Act, decentralised the sector by empowering states to regulate electricity markets, encouraged private sector participation and promoted renewable energy development. These reforms have however remained opaque and elusive as Nigerians still grapple with generators all over the country.

b. Nigerian Electricity Regulatory Commission (NERC)

Established under earlier reforms and strengthened by the new Act, Nigerian Electricity Regulatory Commission oversees licensing, tariff regulation, and consumer protection. It is considered to be a weak institution, displaying inability to muster the needed willpower to enforce the law.

c. National Integrated Electricity Policy (NIEP)

This policy provides strategic direction for long-term sector planning and energy mix diversification.

4. Solutions to Nigeria’s Power Sector Crisis

a. Decentralization and State-Level Electricity Markets

The Electricity Act 2023 allows states to generate and distribute electricity independently. This can reduce pressure on the national grid, encourage localised solutions and improve efficiency through competition. The President should develop a road map for the power sector as a matter of priority and this should be done in active collaboration with the states. The convergency of interests should not be visible only on political matters but should be extended to and include developmental projects.

b. Investment in Infrastructure

Significant investment is required in transmission networks, smart grid technologies and renewable energy systems. Public-private partnerships (PPPs) should be strengthened under the legal framework. Like the reforms implemented in the telecommunications sector, government should be concerned with effective regulation.

c. Cost-Reflective Tariffs

Implementing tariffs that reflect actual costs—while protecting vulnerable consumers—can improve liquidity and attract investors.

d. Promotion of Renewable Energy

The law supports renewable energy integration, including solar mini-grids for rural electrification. This reduces dependence on fossil fuels and improves energy access.

e. Strengthening Regulation and Governance

Enhancing the capacity of Nigerian Electricity Regulatory Commission ensures transparent licensing regime, holistic enforcement of market rules and protection of consumer rights.

f. Addressing Sector Debt

Government intervention—such as debt refinancing and subsidy reforms—can stabilise the sector financially and restore investor confidence.

g. Tackling Vandalism and Energy Theft

Stronger enforcement of electricity offences under the Electricity Act 2023 is essential to reduce losses and protect infrastructure.

5. Conclusion

Nigeria’s power sector crisis is deeply rooted in structural, financial, and regulatory challenges. However, the introduction of the Electricity Act 2023 marks a turning point by providing a modern legal framework for reform. If effectively implemented—alongside investment, decentralisation, and improved governance—the Act offers a realistic pathway to achieving stable and sustainable electricity supply in Nigeria. For now, we hold the President to the solemn promise he voluntarily made to the people of Nigeria that he is willing and able to fulfil that undertaking, failing which he should expect the enforcement of the consequence, which is that Nigerians should not vote for him for a second term in office if the darkness persists. With the resources said to have accrued from the trumpeted economic reforms, there is no reason that Nigerians should keep enduring high tariffs for darkness and estimated billings drain their resources painfully. Abia State has recorded stable power supply through effective partnership with the private sector, so electricity supply is not rocket science and unless the issue is resolved by the President in line with his solemn promise, it may be a burden he will carry for a long time and into the coming election.

Ebun-Olu Adegboruwa, SAN

tribuneonline.ng

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Business

Nigerian states’ revenues rise 93%, but education spending drops — World Bank

Published

20 hours ago

October 9, 2026

Newsbreak365_Admin

The World Bank says Nigeria’s 36 states recorded a 93 per cent increase in revenues between 2023 and 2025 but education received a declining share of the sector’s expenditure.

The bank disclosed this in its latest Nigeria Development Update, which examined how increased public revenues have influenced spending priorities across the federation.

The report was made available to the News Agency of Nigeria by the World Bank in Washington D.C.

According to the report, states’ aggregate revenues rose by approximately 93 per cent in real terms, while expenditure increased by 92 per cent during the period.

The report attributed the improvement partly to exchange-rate reforms, petrol subsidy removal, stronger revenue administration and increased allocations from the federation account.

It said states also benefited from refunds, settlement of longstanding federal obligations, intervention funds, and stronger Value Added Tax collections.

However, education’s share of total state expenditure declined from 14.9 per cent in 2021 to 12.1 per cent in 2025, according to the report.

Health expenditure remained broadly stable at approximately seven per cent, while social protection’s share increased from 1.4 per cent to 4.4 per cent.

The bank said capital expenditure increased significantly, accounting for 61 per cent of state spending, compared with 46 per cent previously.

Transport infrastructure recorded the largest increase, alongside substantial spending on housing, agriculture and other economic investments.

The report quoted Mathew Verghis, the World Bank Country Director for Nigeria, as saying that increased revenues provided the opportunity to improve infrastructure, education, healthcare, and water services.

He said greater spending efficiency, accountability and improved service delivery were essential to ensuring that additional public resources benefited Nigerians.

The bank acknowledged improvements in states’ fiscal reporting, transparency and internally generated revenue.

It, however, stressed that stronger investment in human capital was necessary to translate economic reforms into sustainable employment and improved living standards.

The report also projected average economic growth of 4.4 per cent between 2026 and 2028, subject to sustained reforms and improved service delivery.

It urged federal and state authorities to ensure that increased public revenues translated into tangible improvements in Nigerians’ welfare.

NAN

Source: punchng.com

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Business

Nigeria promotes investment without building production capacity – UNILAG don

Published

20 hours ago

October 9, 2026

Newsbreak365_Admin

A professor of Comparative Political Economy at the University of Lagos, Adelaja Odukoya, has asserted that Nigeria’s economic policies promote investment without sufficiently strengthening domestic production.

Odukoya argued that the contradiction had weakened the country’s productive foundations, with policies encouraging investment and entrepreneurship while failing to create the technological capacity, productive employment and processing industries needed to drive sustainable development.

Odukoya spoke at the maiden edition of the Adeleke University Toyin Falola Annual Lecture, held on Thursday at the Performing Arts Theatre, Adeleke University, Ede.

The lecture had as its theme, “History, Power and Accumulation: Reimagining Africa in the Globally Disorderly Order.”

Odukoya identified several contradictions in the way the Nigerian state manages economic activity.

He said, “The state promotes investment without creating conditions for technological transfer. It encourages entrepreneurship without generating sufficient productive employment.

“It expands primary-product exports while leaving processing capacity undeveloped. It constructs infrastructure without establishing strong linkages with domestic production.”

According to him, the contradictions explain why increased economic activity and accumulation do not necessarily translate into development.

“Accumulation is not synonymous with development,” Odukoya stated.

He argued that genuine development should be measured by the expansion of productive, technological, institutional and human capabilities.

“A country could attract investment, export minerals and agricultural commodities and record economic activity while still failing to build the domestic industries and technological capabilities required for long-term development,” he said.

His argument was echoed by Prof Toyin Falola, who said Africa’s vast natural resources would continue to reinforce dependency unless governments developed the industrial, technological and institutional capacity to transform them into productive power.

Falola said Africa’s resource problem was not simply one of historical exploitation, but also the continent’s failure to convert its resource endowments into power.

“The issue, however, is not just to repeat the history of exploitation. It is more important to know how Africa turns its great resources into power,” Falola said.

He argued that Africa could not afford to remain a spectator as global economic and geopolitical arrangements continued to change, stressing that resource ownership without the capacity to add value would not guarantee influence.

Falola said the continent required a combination of knowledge, government policy and industrial capacity to change its economic position.

“There must be universities that generate new knowledge; there must be governments that translate this knowledge into policies; there must be industries that add value to the continent’s natural resources,” he said.

He added that Africa needed more than improved infrastructure and stronger economies if it wanted to exercise greater influence in the global system.

“The future of the continent will require more than just better infrastructure, improved economies, and more effective political institutions,” Falola said.

Source: punchng.com

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Business

Import waivers, insecurity end two-year agric trade surplus

Published

20 hours ago

October 9, 2026

Newsbreak365_Admin

Import waivers meant to ease hunger and insecurity on farms have led to a deficit, ending a two-year run of surpluses, as Nigeria’s agricultural trade balance swung from a N740.27bn surplus in the first half of 2025 to a N56.13bn deficit in H1 2026, according to agriculture and trade experts.

Recent foreign trade data from the National Bureau of Statistics showed that agricultural exports fell by 33.28 per cent, or N985.14bn, to N1.98tn in H1 2026 from N2.96tn in H1 2025.

Agricultural imports fell by only 8.50 per cent, or N188.74bn, to N2.03tn from N2.22tn over the same period. The gap between the two movements produced a N796.40bn swing in the trade balance.

Nigeria recorded a N365.74bn deficit in H1 2023, when imports of N926.25bn far exceeded exports of N560.51bn. The balance then turned to a N194.92bn surplus in H1 2024 before it widened to N740.27bn in H1 2025.

In separate phone interviews with The PUNCH, Agribusiness experts, including the Chairman of the Lagos Chamber of Commerce and Industry’s Agricultural and Allied Group, Tunde Banjoko, explained that recent government policy led to the shift.

Banjoko said, “Some waivers were given for products like palm oil and rice, and the import tariffs were drastically reduced. It became more favourable for people to import than to patronise local producers.”

He said the waivers on food commodities hurt domestic producers, even though lower tariffs on tractors and manufacturing equipment helped them.

According to Banjoko, “The effect is that our imports will rise above our exports. Second, we will discourage local production. Thirdly, we will be reducing employment, because some factories will shut down if they are not able to compete.”

Banjoko also said weak funding for processors compounds the problem. He said foreign direct investment flows mainly into the capital market rather than into production and processing, so local processors cannot scale.

He urged the Federal Government to speed up the Special Agro-Industrial Processing Zones programme. “We should speed up such projects where we can produce enough for our country and start exporting, not look for shortcuts by reducing prices,” Banjoko added.

Meanwhile, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, identified two major factors behind the deficit. He said the first was the Federal Government’s decision to allow some food imports to tackle runaway inflation.

Yusuf said, “The first is the decision of the government to allow for some food imports as a result of the challenges of food inflation, which at a point was getting almost completely out of hand.”

He added that insecurity worsened the supply gap and cut export capacity, stating, “Insecurity led many farmers to leave their farms. Many of them have ended up in IDP camps, and quite a number have completely abandoned farming.”

He added that farmers cannot export without output. Yusuf said, “You can only export when you have the output.”

Yusuf also said high input costs and falling produce prices have discouraged farming. He said, “Most of these inputs are imported, so the exchange rate situation has seriously affected the cost of inputs, and the prices of produce have gone down.”

He urged the Federal Government to cut the cost of fertiliser, agrochemicals, machinery and improved seedlings. He also called for a minimum guaranteed price for agricultural produce.

Yusuf said, “The government can establish a threshold below which, if prices fall, it will give farmers some compensation. That is the way it is done in many other economies.”

Source: punchng.com

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