Then and Beyond: Powering Nigeria—From Flickering Lights to a Brighter Tomorrow

By: Oluseun FATOPE

Electricity has long been both a symbol of progress and a source of frustration in Nigeria. From the days when power outages were so routine that “NEPA has taken light” became a national catchphrase, to today’s ongoing struggles with grid instability and subsidy reforms, the story of Nigeria’s electricity sector is one of promise, setbacks, and resilience.

Then: The Flickering Past

In the post-independence era, Nigeria’s electricity infrastructure was modest but functional. The establishment of the National Electric Power Authority (NEPA) in 1972 aimed to centralize and expand power generation and distribution. However, decades of underinvestment, mismanagement, and corruption led to a decline in service quality. By the 1990s, blackouts were commonplace, and the term “NEPA” became synonymous with unreliability.

The early 2000s saw attempts at reform, including the unbundling of NEPA into the Power Holding Company of Nigeria (PHCN) and subsequent privatization efforts. Despite these initiatives, challenges persisted: inadequate generation capacity, transmission bottlenecks, and widespread electricity theft

Now: The Struggle Continues

Fast forward to 2025, and Nigeria’s power sector remains in flux. Recent reports indicate that the country has reduced electricity subsidies by 35% following a targeted tariff hike for high-usage consumers. This move aims to alleviate fiscal pressures and attract investment. However, the sector still grapples with significant issues: A failing grid system that often collapses under demand; gas shortages that hamper thermal power plants; vandalism of infrastructure leading to service disruptions; a crippling debt load, with unpaid debts to power generating companies reaching trillions of naira.

While the government plans to address some of these debts through budget allocations and promissory notes, the path to a stable and efficient power sector remains challenging.

The Human Cost: Impact on Small Businesses, Investments, and Households

The unreliability of electricity has had profound and far-reaching consequences across the Nigerian economy.

For small businesses, it’s an endless cycle of frustration and excessive spending on alternative energy. According to the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), over 90% of SMEs cite power outages as a major operational challenge. Businesses are forced to rely heavily on expensive diesel or petrol generators, significantly increasing their operating costs and reducing competitiveness. A 2023 survey by the Lagos Chamber of Commerce and Industry (LCCI) revealed that SMEs spend up to 40% of their revenue on alternative power sources.

Similarly, unstable power supply has been a critical deterrent for foreign direct investment (FDI). The World Bank’s “Doing Business” report consistently ranks Nigeria poorly in the “Getting Electricity” metric. Investors cite the unpredictability of energy supply as a major risk factor, reducing Nigeria’s attractiveness compared to regional peers like Kenya and Ghana.

Sadly, ordinary Nigerians largely bear the brunt of the inefficiency. A National Bureau of Statistics (NBS) report from 2024 estimated that about 43% of households still lack access to reliable electricity. Families spend disproportionately on backup generators, candles, and rechargeable lamps, while enduring disruptions to education (e.g., students unable to study at night) and health (e.g., vaccine storage failures in health centers).

The stories of the Failed Revival Attempts

Several steps have been taken in recent years to resuscitate the power sector, but many have yielded disappointing results:

For one, the 2013 privatization of the PHCN successor companies was intended to inject efficiency into the sector. However, many private companies lacked the technical capacity and financial muscle to upgrade infrastructure, leading to minimal improvements in service delivery.

In the same vein, the Central Bank of Nigeria (CBN) also launched multiple intervention funds, such as the N213 billion Nigeria Electricity Market Stabilization Fund and the N140 billion Solar Connection Intervention Facility. However, poor disbursement practices, lack of transparency, and governance challenges hindered their impact.

Beyond: Illuminating the Future.

Looking ahead, Nigeria’s energy landscape could undergo transformative changes:

Nigeria has a fertile ground to effectively harness various alternative energies. With abundant sunlight and wind, Nigeria has the potential to diversify its energy mix. Investments in solar and wind energy could reduce reliance on fossil fuels, enhance energy security and also reduce climate change consequences.

The utilisation of smart grids, energy storage solutions, and digital metering can improve efficiency, reduce losses, and enhance consumer satisfaction.

In addition, transparent policies and robust regulatory frameworks can attract private investment and ensure accountability within the sector.

Conclusion

The journey from “then” to “now” in Nigeria’s power sector is marked by challenges and lessons. As the nation stands at the cusp of potential transformation, embracing innovative solutions and steadfast reforms can pave the way for a brighter, electrified future. In the spirit of “Then and Beyond,” understanding our past illuminates the path forward.