Nigeria’s power sector in 2024: Key milestones, innovations, and policy shifts

Nigeria’s Power sector has evolved over the years with improved investments by both the government and private businesses, but it is far from achieving reliable and sustainable energy for all its citizens.

Amidst numerous challenges, the sector recorded notable activities and developments this year, from policy reforms and infrastructure upgrades to increased private sector participation and investments in renewable energy.

It also recorded the highest number of grid collapses in a single year.

As the country strives to bridge its energy gap and power its growing economy, the notable events and developments in the power and utility sector will shape the country’s future as we draw the curtains on 2024 and knock on the new year.

The Ministry of Finance Incorporated (MOFI) officially assumed ownership and management of the Federal Government’s 40% equity in the Electricity Distribution Companies (DisCos). This transition aligns with MOFI’s mandate to ensure efficiency in managing these companies and boost government revenue.  

During the 2013 privatization of the 11 DisCos, MOFI granted a Power of Attorney (PoA) to the Bureau of Public Enterprises (BPE) to manage the government’s retained 40% shares. However, this arrangement was recently revised. In two separate letters signed by the Minister of Finance and Coordinating Minister for the Economy, as well as MOFI’s CEO, the PoA was terminated. 

This decision underscores the government’s intent to centralize ownership, management, and control of its equity holdings under MOFI, as stipulated in the agency’s founding legislation. 

This shift marks a significant step toward professionalizing and centralizing the management of government-owned assets in the power sector, a sector long hampered by inefficiency and financial mismanagement. 

By consolidating control under MOFI, the government aims to enhance governance, accountability, and operational efficiency. This restructuring could also attract private sector investment, stabilize the power supply, and expand electricity infrastructure. 

For Nigerians, this move holds the potential for improved electricity services and a more sustainable energy sector, addressing one of the country’s critical development challenges. 

President Bola Ahmed Tinubu signed the Electricity Act (Amendment) Bill 2024 into law on February 9, marking a significant development in Nigeria’s efforts to reform its power sector. 

The Electricity Act (Amendment) Bill, 2024, seeks to “address the development and environmental concerns of host communities, and sets aside five percent of the actual annual operating expenditures of power generating companies from the preceding year for the development of their respective host communities.” 

This development follows the recognition of the urgent need to reform Nigeria’s electricity infrastructure, which has faced issues of instability, insufficient investment, and inadequate access, especially in rural areas. 

Also, the Bill has measures to empower the Nigerian Electricity Regulatory Commission (NERC) to enforce stricter compliance with industry standards and encourage the transition towards cleaner energy alternatives became more imperative 

This move is seen as a crucial step toward addressing Nigeria’s electricity crisis, which has hindered economic growth and development for decades. By fostering a more transparent and sustainable energy framework, the amendment is expected to pave the way for increased foreign investments, more reliable power supply, and the creation of jobs in the renewable energy sector. 

In March 2024, the Federal Government announced the removal of subsidies on electricity mostly for customers on Band A feeders, promising them improved supply.

The government argued that the removal of the electricity subsidy was to improve supply and allow it to pay off its mounting debt in the utility sector.

At the time, the federal government owed electricity-generating companies over a trillion naira while the generating subsector grappled with poor gas supply in power plants.

Various stakeholders in the Power sector had urged the federal government to pay the debts it owed GenCos. In the same vein, the President had promised to address the energy poverty faced by the majority of Nigerians.

In February 2024, Nigeria’s Minister of Power, Adebayo Adelabu, pledged to ensure all households and businesses are properly metered.

Adelabu stated this in Okene, Central senatorial district of Kogi State when he commissioned a 60MVA, 132/33kV power transformer within the Okene Transmission Substation.

The project which was awarded on the 6th of March 2023 under the Presidential Power Initiative was aimed at improving power supply to parts of Kogi, Edo, and Ondo states.

Providing metres to Nigerians helps ensure accountability in electricity billing by distribution companies. With accountable billing comes fairness and efficiency in fee collection.

In May 2024, the Federal Government said it would patronise local manufacturers for electricity equipment.

The Minister of Power, Bayo Adelabu promised that agencies under the Ministry of Power would be encouraged to patronise local manufacturers.