- Nigeria pauses granting state electricity regulatory autonomy.
- The pilot phase emphasised careful planning and testing.
- Collaboration with existing companies highlighted for success.
Nigeria halted granting states regulatory oversight of electricity markets, emphasising the need for a pilot phase. Under President Bola Tinubu, the amended Electricity Act (EA) allows states to create independent electricity markets and regulatory agencies.
Power Minister Adebayo Adelabu stressed careful planning at Abuja’s 8th Africa Energy Market Place (AEMP) Nigeria. “We must tread carefully; we should not rush. The market is not mature enough,” Adelabu said. “We need just a couple of states as pilots, so I halted further regulatory autonomy.”
The EA empowers states to license electricity generation, transmission, and distribution. However, Adelabu emphasised a three to twelve-month pilot phase to identify and fix issues before full implementation.
Lagos State, consuming over 40% of national electricity, poses a significant challenge. “The moment you take over regulatory activities of Lagos State, the tariff and subsidy responsibilities will fall on the state,” Adelabu noted.
Prof. Barth Nnaji, former Minister of Power and Chairman of Geometric Power highlighted the hurdles states face in building regulatory capacity. He stressed the need for collaboration with existing Distribution Companies (Discos).
“State governments must understand they can’t suddenly take over the wires. They must collaborate with existing companies,” Nnaji said. “Success will come over time, starting with hand-holding by the national regulator.”
The pause ensures states develop the necessary frameworks and capacities to prevent energy theft, maintain infrastructure, and recover investment costs.