Nigeria’s electricity sector remains fragile. About 85 million Nigerians (43% of the population) lack access to grid electricity. This is one of the biggest energy access gaps in the world.
Generation capacity is roughly 12,000MW–13,500MW, but far less power is actually delivered. In 2023, Nigeria generated 4,500MW for a population of over 200 million. For comparison, Ethiopia, with a population of 132 million, recently added 6,000MW to its generation capacity. Prior to that, it generated 5,200MW.
Nigeria’s under-delivery is largely due to systemic challenges in the grid. These include technical inefficiencies, vandalism and ageing infrastructure.
A new Electricity Act was passed in 2023 to address these problems by providing a legal and institutional structure. It was also designed to steer Nigeria’s power sector towards greater efficiency, integrated planning and the inclusion of renewable sources of energy.
For the first time, the act empowered the 36 state governments to generate, transmit and distribute electricity within their territories.
By July 2025, 10 states had introduced their own electricity market laws. They had also begun to set up state-level regulators and frameworks to oversee electricity operations within their borders.
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Until such laws are in place, the Nigerian Electricity Regulatory Commission continues to regulate the sector.
But the shift from federal control towards localised electricity solutions raises questions about coordination, regulatory clarity and the capacity of individual states.
These are the challenges highlighted in the African Development Bank’s Electricity Regulatory Index Report, published in 2024. The report covers 43 countries.
Overall, the index’s 2024 tables place Nigeria 15th out of the 43 assessed countries.
I reviewed the report based on my academic research, which has included a PhD on reform in Nigeria’s power sector. The report makes it clear that Nigeria’s electricity reforms look solid on paper, but the real-world results still lag. The country’s energy sector is not uniformly ready to carry out the reforms. And, although there are rules and the regulator is not starting from zero, Nigerians still don’t have consistent, affordable and reliable power.
The African Development Bank’s message is clear. To provide a reliable service, utilities must be transparent and financially sustainable.
The indicators
The index scores countries on three aspects of regulation:
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governance (laws and institutions)
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substance (whether rules and tools exist and are applied)
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outcomes (what consumers and utilities experience).
So how does Nigeria score?
Governance: Nigeria performs strongly. It had a Regulatory Governance Index score of 0.897 in 2024, which is high.
The countries ahead of Nigeria are Uganda, Tanzania, Senegal, Kenya, Rwanda and
South Africa.
The score reflects a reasonably well-defined legal mandate for the regulator and formal processes for decision-making. It suggests Nigeria’s electricity regulatory frameworks are comparatively robust by continental standards.
However, a gap remains. Nigeria is among the countries where regulatory documents and decisions are not consistently published. This weakens transparency and public accountability, according to the report.
Some others in this category are Ghana, Burundi and Congo.
Regulations: Nigeria scores well here too (0.843). The top performing countries are Rwanda, Uganda, Senegal and Kenya.
Many of the essential instruments such as tariff methodologies, licensing frameworks, grid codes and consumer protection rules are in place.
But there is a gap between design and robust enforcement.
Outcomes: Here Nigeria continues to struggle. It scores 0.642, dragged down especially by quality of service delivery (0.512). Kenya, Senegal and Zimbabwe score above 0.80.
The report highlights severe reliability problems. Some surveys reported over 32 outages per month. This places Nigeria among the countries with the least reliable electricity supply globally.
Frequent power outages affect Nigeria’s economy. It drives up the cost of doing business, stalling production and discouraging investment.
Distribution companies also face challenges. Only about half of the revenues owing to them end up in their coffers. This undermines financial sustainability.
Nigeria’s overall position of 15th in the Electricity Regulatory Index’s 2024 tables underscores a gap: strong governance and a solid regulatory toolbox, but weak consumer outcomes.
Despite reforms, weaknesses persist
Five issues explain why outcomes trail behind governance and substance:
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weak enforcement of rules, reducing investor and consumer confidence
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financial weakness: high losses and poor tariff collection undermine sector sustainability
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supply unreliability: outages are frequent and generation capacity is limited
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governance gaps: political interference constrains regulator independence
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limited consumer protection: complaints resolution and metering progress remain inadequate.
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Moving forward
Nigeria’s electricity sector requires stronger, coordinated reforms to translate regulatory frameworks into reliable supply.
The federal government must make policies consistent and give the commission independence. Subsidies must be transparent and targeted.
The Nigerian Electricity Regulatory Commission must enforce tariffs, ensure there’s metering and protect consumers. It must also enhance market transparency. State governments, empowered under the 2023 Act, should establish credible regulatory agencies and align policies with national standards.
Distribution companies and generation companies must become more efficient and invest in infrastructure upgrades.
Finally, development partners and investors should provide technical and financial support tied to accountability.
Together, these actions can create a sustainable, consumer-focused electricity market.