FG, Investors differ on states’ capacity to regulate electricity markets
The Federal Government and investors in the Nigerian Electricity Supply Industry (NESI) have expressed divergent opinions on whether state governments currently possess the capacity to regulate electricity markets within their jurisdictions.
The disagreement emerged at an event in Abuja commemorating the 20th anniversary of the Nigerian Electricity Regulatory Commission (NERC).
Speaking on behalf of the Federal Government, the Minister of Power, Chief Adebayo Adelabu, said the Electricity Act empowers states to leverage local resources to meet their specific energy needs. Represented by the Director of Distribution, Umar Mustapha, Adelabu emphasized collaboration among federal and state governments, as well as the private sector, to enhance electricity delivery across the country.
“The Act allows states, many of which are larger than some neighbouring countries, to take charge of their destinies,” Adelabu said. “They can leverage solar, hydro, or wind resources to build grids that meet their economic and social needs. By opening the value chain to states and private investors while fostering competition, consumers will have more options, better services, and innovative pricing.”
He cautioned against hasty amendments to the Electricity Act, stressing the need for full implementation before any review. Adelabu also disclosed that the Federal Ministry of Power is developing a National Electricity Policy Coordination Framework to align federal and state policies, support new state regulators, and strengthen investor confidence through consistent regulations.
However, investors at the event expressed reservations about the readiness of states to manage electricity markets. The Group Managing Director/CEO of Sahara Power Group, Mr. Kola Adesina, argued that most states lack the financial and technical resources to effectively regulate or manage power infrastructure.
“The states don’t have the wherewithal to build electricity infrastructure. Breaking down inefficiency into another level of inefficiency only spreads the problem,” Adesina said. “Policy and regulation must be aligned, and gaps in the current Act need to be addressed quickly.”
Also speaking, NERC Vice Chairman, Musiliu Oseni, reflected on the commission’s two decades of service, acknowledging significant progress but noting persisting challenges. He revealed that while 15 states have received transfer orders and 11 completed the six-month transitional period, only eight states have fully operational regulatory commissions. He mentioned Edo, Ogun, and Oyo as among those yet to operationalize theirs.
Oseni advised emerging state regulators to maintain professionalism and objectivity in their roles. “Regulation is not populism or politics; it requires analytical rigour and independence. Remember, there must be a utility before you can be called a regulator,” he said.
The discussion underscored ongoing debates about decentralizing electricity regulation in Nigeria and the preparedness of subnational governments to manage energy markets effectively.
