In 1999, when Nigeria returned to democratic governance, average electricity generation was roughly 2,000 megawatts for a population of about 120 million people. In 2024, average generation hovers between 3,500 and 4,500 megawatts for a population of over 220 million. The number has grown. The problem has not.
To understand why, you need to understand that Nigeria’s electricity crisis is not one problem. It is at least five, and they are tangled together in a way that means solving one without the others produces almost no visible result.
The gas problem
Most of Nigeria’s power plants run on gas. Nigeria has an abundance of gas — it is one of the largest gas reserves in the world. And yet, plants routinely operate below capacity because the gas does not arrive. Pipelines are old, vandalised, or simply never built to reach the plants that need them. Gas suppliers are owed money by the electricity distribution companies. The electricity companies say they cannot pay because consumers do not pay them. The chain of debt runs in both directions and nobody moves until it is resolved.
The transmission problem
Even when power is generated, the national grid — operated by the Transmission Company of Nigeria — cannot always carry it. The grid’s wheeling capacity, meaning how much electricity it can move at any one time, has been a persistent bottleneck. A plant can generate 500 megawatts and the grid can carry 200 of it. The rest is either not generated or is lost.
The distribution problem
The distribution companies — the DISCOs — that were privatised in 2013 were supposed to invest in the last-mile infrastructure that actually delivers electricity to homes and businesses. Many of them have not, partly because the pricing regime set by the regulator made it difficult to earn enough revenue to reinvest, and partly because some of the companies that won the privatisation bids were not well capitalised to begin with.
The pricing problem
Electricity in Nigeria has historically been priced below what it costs to produce and deliver. This is partly a political choice — electricity tariffs are deeply unpopular — and partly a structural one. The Multi-Year Tariff Order system is supposed to allow for regular, cost-reflective tariff adjustments. In practice, adjustments are delayed, reversed under public pressure, or implemented partially. No investor will put money into a system where they cannot recover their costs.
The governance problem
Electricity in Nigeria sits across federal and state jurisdictions in a way that creates coordination problems. The federal government controls generation and transmission. States are supposed to encourage distribution and off-grid solutions. In practice, accountability is diffuse. When power fails — and it will — it is not always clear who is responsible for fixing it.
Why it persists
Each of these problems has a technical solution. Gas supply can be fixed with pipeline investment and payment reform. Transmission can be expanded. Distribution companies can be refinanced or restructured. Tariffs can be adjusted with social protections for the poor built in.
What has been missing is the political will to take all of these steps simultaneously, absorb the short-term pain, and hold the line long enough for the system to stabilise. Every previous reform has addressed one or two of these problems in isolation, encountered resistance, and stalled.
The question Nigeria keeps avoiding is not how to fix electricity. It is who bears the cost of fixing it, and whether those in a position to make that decision are insulated enough from the consequences of not doing so.
So far, they have been.
