Former President Olusegun Obasanjo has asserted that Nigeria will continue to struggle with its electricity challenges until the private sector is given greater control over the power industry. He argued that the government must transfer more responsibility to private operators to achieve a stable and efficient electricity supply.
The former president suggested that Nigeria should adopt the same model that successfully transformed the telecommunications sector. He noted that the transition from a state-dominated monopoly to a competitive, privately-led market was the primary driver of the telecoms revolution in the country.
His remarks, which were detailed in a recent report by Channels Television, point to a growing consensus among economic experts regarding the limitations of the current electricity supply model in Nigeria.
The telecommunications model as a blueprint
Obasanjo pointed to the dramatic shift in the Nigerian telecommunications landscape as evidence of the benefits of full-scale privatisation. Decades ago, the sector was dominated by the state-owned Nigerian Telecommunications Limited (NITEL), which was characterised by poor service delivery, limited coverage, and high costs. The entry of private players and the subsequent deregulation of the industry turned a struggling monopoly into a globally competitive and highly profitable market.
He suggested that the power sector requires a similar structural overhaul. While the Nigerian electricity supply industry (NESI) underwent a major unbundling process in 2013 following the privatisation of the Power Holding Company of Nigeria (PHCN), the results have remained underwhelming for most consumers. The transition to private Distribution Companies (DisCos) and Generation Companies (GenCos) has not prevented frequent national grid collapses, poor voltage regulation, and massive revenue shortfalls.
The current electricity landscape is marked by a persistent liquidity crisis. Distribution companies often struggle to collect sufficient revenue from consumers to pay the generation companies, creating a bottleneck that prevents necessary investment in infrastructure. This cycle of debt and underinvestment has left the national grid vulnerable to frequent breakdowns, which often plunge large parts of the country into total darkness.
Industry experts note that while the 2013 privatisation intended to bring in private capital, the level of actual operational autonomy and infrastructure ownership remains constrained by regulatory hurdles and the inability of the market to reach a sustainable equilibrium. Obasanjo’s call for “greater responsibility” implies a move toward deeper privatisation, potentially involving more direct ownership of transmission assets or a significant reduction in government-dictated tariff structures that currently affect investor confidence.
The Nigerian Electricity Regulatory Commission (NERC) continues to manage the difficult task of balancing consumer affordability with the commercial viability of private operators. As the government seeks to implement new energy policies, the debate over whether the state should retain control of the transmission backbone or fully relinquish it to private entities remains unresolved.
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