Nigeria’s ₦7 Trillion Power Sector Expenditure Fails to End Persistent Blackouts
Why Nigeria’s Power Grid Still Collapses
More than a decade after the landmark privatisation of Nigeria’s electricity industry, the nation continues to grapple with severe energy instability despite a cumulative expenditure exceeding ₦7 trillion across four successive administrations. Since the 2013 handover of the Power Holding Company of Nigeria (PHCN) assets to private entities, the federal government has consistently injected trillions of naira into the sector to stabilise generation, transmission, and distribution, yet reliable supply remains elusive.
The magnitude of the crisis was highlighted in early 2026, as the national grid recorded two total collapses within a single month. These systemic failures plunged major economic hubs into darkness, reigniting debates regarding the efficacy of post-privatisation reforms and the transparency of government interventions.
Historical Spending and Administrative Efforts
The trajectory of Nigeria's power sector funding spans multiple tenures, each characterized by significant financial commitments and unmet targets:
Obasanjo Administration: Initiated the Electric Power Sector Reform Act (EPSRA) of 2005. Despite promises to eliminate outages, generation frequently plummeted to 1,800 megawatts (MW) due to dilapidated infrastructure.
Jonathan Administration: Oversaw the formal privatisation in 2013. Estimates during this period suggested Nigeria required approximately $900 billion over three decades to achieve energy sufficiency.
Buhari Administration: Secured over $6 billion in external loans for transmission upgrades and launched the Siemens Presidential Power Initiative (PPI). The PPI aimed for 25,000MW by 2025, a target that currently remains largely unfulfilled.
Tinubu Administration: Currently managing a $500 million World Bank-backed Nigeria Distribution Sector Recovery Programme (DISREP). Despite these efforts, the sector is burdened by a ₦4 trillion debt owed to Generation Companies (GenCos) for unpaid subsidies and legacy obligations.
The Challenges of Incomplete Privatisation
Industry experts point to the "incomplete" nature of the 2013 privatisation as a primary bottleneck. While generation and distribution were sold, the Federal Government retained 100% ownership of the Transmission Company of Nigeria (TCN) and a 40% equity stake in Distribution Companies (DisCos).
Consumer rights advocate Kunle Olubiyo noted that continued government involvement has hindered the sector from achieving the market-driven efficiency seen in the telecommunications industry. Furthermore, energy consultant Bode Fadipe attributed the stagnation to policy inconsistency and a lack of political will to enforce metering and cost-reflective tariffs.
Structural Weaknesses and Economic Impact
The transmission network remains the most vulnerable segment of the value chain. Outdated equipment, gas supply constraints, and a lack of automated monitoring systems leave the grid susceptible to frequent collapses.
The Electricity Act of 2023 has attempted to decentralize the sector by granting state governments the authority to regulate their internal electricity markets. However, analysts remain divided; while some view this as a path to regional energy independence, others fear it may place an undue financial burden on states with limited existing infrastructure.
For Nigeria’s industrial and residential consumers, the persistence of "darkness" despite ₦7 trillion in spending represents a significant barrier to economic growth. Small businesses continue to endure high operational costs due to a reliance on alternative energy, while the national grid remains fragile.
To break this cycle, energy law experts, including Yemi Oke, suggest a shift toward modern grid monitoring technologies and an aggressive expansion of off-grid and mini-grid solutions. Without deep-seated structural reforms and a transition away from recurring subsidies toward a transparent, competitive market, the sector risks remaining a "sunk cost" for the Nigerian economy.
