Nigeria’s energy sector reached a milestone when President Bola Ahmed Tinubu signed the 2023 Electricity Act.
The new law improves power value chain regulation and administration, but more is needed to boost electricity access for common Nigerians. It removes barriers to state electricity market efficiency.
This should improve Nigeria’s electrical industry’s governance and performance.
NERC can now better address post-privatization challenges. This law will only be beneficial when all states have electricity laws.
New Hampshire Capital Ltd CEO Odion Omonfoman told Nairametrics that Nigeria is transforming its electrical sector in three steps.
A constitutional amendment under the previous President, Buhari, allowed states to create, distribute, and transmit electricity.
President Tinubu signed the Electricity Act into law, completing the sector’s transformation’s second step. This Act improves electricity value chain regulation and management, particularly state electricity market systems.
All states must pass their own electrical laws in the third phase to successfully regulate the sector. This should improve Nigeria’s electrical industry’s governance, efficiency, and performance.
Distribution and power generation businesses will operate uniformly until states pass their own electricity laws. States must work on their electricity legislation to improve access for all Nigerians.
86 million Nigerians lack electricity.
The International Energy Agency (IEA) and other groups said in June 2023 that 86 million Nigerians were without electricity in 2021. The survey noted that 80% of sub-Saharan Africans lack electricity.
The paper also noted that Nigeria and other sub-Saharan African countries confront limited financing, risk mitigation resources, financially unsustainable utilities, and a need for local financial institutions with access-related knowledge. Several obstacles hinder power access projects.
2023 Electricity Act may modify this.
But, if the 2023 Electricity Act is properly implemented and states adopt and execute their own power laws, it might benefit 86 million Nigerians without electricity.
Lagos, Edo, Ondo, and Kaduna have their own electricity laws. State electricity laws and policies can improve service performance and market competition.
Due to increasing competition, customers can choose between the national grid and a state-licensed grid operator. Nigerians should have better electrical access after the Act is fully implemented and states pass their own laws.
