Twelve years after Nigeria privatized its power sector, the country — with over 220 million citizens — still struggles to supply barely 5,000 megawatts of electricity. Meanwhile, generation companies can produce up to 12,000 megawatts, but that power remains stranded. The reason is clear: a broken transmission system.
The 2013 reform copied the telecom privatization model, assuming similar success. Instead, it created a fragmented electricity value chain — generation, transmission, and distribution — run by disconnected entities. Critically, while generation and distribution were privatized, transmission was left under government control through the Transmission Company of Nigeria (TCN). That single decision has proven fatal.
TCN still operates colonial-era infrastructure incapable of wheeling current power needs, let alone future demand. Grid collapses, load rejection, and stranded generation capacity are the predictable consequences. The private-sector GenCos have invested and improved capacity; TCN has stagnated.
The impact has cascaded downstream. Distribution companies (DisCos) are chronically under-supplied, unable to scale, and now saddled with an estimated ₦4 trillion debt burden. Consumers remain in darkness, businesses rely on generators, and economic growth is constrained.
Now, as the initial privatization agreements expire, Nigeria has a rare chance to correct course. However, the recent proposal by Power Minister Adebayo Adelabu to split TCN into two government-controlled entities misses the point. Fragmenting failure does not produce reform — it multiplies inefficiency.
What Nigeria needs is not more bureaucracy but a modern, investment-driven grid. Transmission must be restructured, opened to private capital and expertise, and aligned with performance incentives. This is how successful power markets operate globally, from Europe to Asia.
Nigeria’s electricity challenge is not generation; it is transmission. Rather than doubling down on a state structure that has failed, the government should pursue bold market-driven reforms. The window to act is now. The cost of hesitation is another decade of darkness.
My objection to the policy matrix proposed by Minister Adelabu is anchored on the dictum that government has no business in business. Until government completely hands off the management of electricity — as it did with the telecommunications sector 25 years ago — chaos in the power sector will persist.
Minister Adelabu, justifying continued government ownership of TCN, announced plans to unbundle the Transmission Company of Nigeria into two entities: the Nigerian Independent System Operator (NISO) and the Transmission Service Provider (TSP). According to him, the objective is to promote operational clarity, transparency, and value creation through improved corporate governance.
However, to me — and to many Nigerians thinking beyond conventional boundaries — this appears to be a misguided move. The fundamental problem with TCN is bureaucracy and corruption, features often associated with government-controlled enterprises. Splitting TCN into two agencies still under state control cannot make it more efficient. It will only create duplication, confusion, and further inefficiency.
In other words, fix the transmission bottleneck, do not multiply it.
Nigeria’s history is clear: government-run enterprises are typically riddled with inefficiency, redundancy, and corruption. That reality led to the creation of the Technical Committee on Privatisation and Commercialisation (TCPC), later transformed into the Bureau of Public Enterprises (BPE). Yet here we are, re-entrenching government control where privatization should be deepened.
A quick reminder: the four NNPC-owned refineries remain comatose despite years of turnaround maintenance — an unfortunate but useful lesson.
Given this precedent, government should not renew partnership contracts with the 11 DisCos that have failed to meet expectations. They should be dissolved, and alongside TCN assets, transferred to existing GenCos (currently estimated at 23 operational firms with a combined capacity of 13,461MW) and other competent investors. These entities should then be assigned specific zones to manage, thus allowing a single operator to oversee generation, transmission, and distribution within each region.
Nigeria already has six geopolitical zones, a ready framework for restructuring the electricity market.
Some notable GenCos include Mainstream Energy (operator of Kainji, Jebba, and Zungeru hydros), Afam, Alaoji NIPP, Azura- Edo, Egbin, Geregu, Odukpani, Shiroro, and Trans-Amadi, among others. With this spread, it is feasible to allocate zones to capable operators who can seamlessly manage the full electricity value chain.
This is the norm in Europe, North America, and many parts of Asia where free-market systems thrive. In contrast, state-controlled utilities are common in monarchical or communist economies like parts of the Middle East and China. Nigeria has officially transitioned from a command-and-control economy to a market-driven one. So why the hesitation in liberalizing transmission?
The argument that electricity is a security-sensitive asset and must remain state-controlled no longer holds water. Telecommunications — equally sensitive — was fully liberalized 25 years ago with no negative security consequences. On the contrary, it has flourished, creating indigenous champions like Globacom which is operating beyond Nigeria’s borders and helping Nigeria earn foreign exchange.
Why should we accept fear-mongering in the power sector when liberalization succeeded in telecoms?
Globally, ownership models vary. France’s EDF and Norway’s Statnett remain state-controlled; the U.K. and U.S. systems are largely private. China’s State Grid is state-owned, while Japan and South Korea maintain mixed systems. The rule is clear: no one-size-fits-all. Pragmatism must guide policy.
Nigeria followed global liberalization trends when it reformed banking in the 1990s, enabling indigenous entrepreneurs like Jim Ovia (Zenith) and the founders of GTBank- Fola Adeolaand late Tayo Aderinokun, to reshape the industry, now dominant across Africa and expanding globally. Electricity reform should follow a similar trajectory.
Instead, government appears determined to retain control by splitting TCN — an action that contradicts global best practice and perpetuates inefficiency.
Furthermore, Nigeria is lagging in renewable energy despite enormous potential in solar, wind, and hydro. Countries like Ethiopia, DRC, and Eswatini have leveraged PPPs to scale renewable adoption. Nigeria must do the same if it intends to unlock projected benefits — including IRENA’s forecast that renewables could provide 60% of Nigeria’s energy needs by 2050.
Rather than clinging to outdated control models, we should be developing mini-grids and decentralized systems to bypass an overstretched, outdated national grid that collapses under loads above 4-5GW, leaving 7-12GW stranded.
Overcoming energy poverty is essential to achieving Nigeria’s ambition of becoming a $1 trillion economy, like Indonesia — our peer in the 1960s. The current economy effectively operates only between 6 a.m. and 6 p.m., running at half capacity due to unreliable electricity. Opening the economy 24/7 would unlock productivity and accelerate industrialization.
China became “the world’s factory” after achieving surplus electricity through mega-projects like the Three Gorges Dam. India expanded access and reliability through mini-grids. Nigeria must study and apply these lessons.
To remain trapped in perpetual darkness after 12 years of partial deregulation is unacceptable. Nigeria must declare an emergency in the power sector, dismantle outdated structures, liberalize transmission, encourage private investment, and embrace renewable solutions. Only then can we unlock economic potential, expand manufacturing, and drive sustainable growth.