New Rules, Old Darkness: Nigeria’s Power Sector Reforms Walk a Tightrope Between Promise and Proven Failure
By Ade Adesokan
Nigeria’s electricity crisis has never suffered from a shortage of policy announcements. What it has consistently lacked is follow-through.
The latest interventions by the Nigerian Electricity Regulatory Commission — Order No. NERC/2026/026 on transmission loss reduction and the Mini-Grid Regulations 2026 (NERC-R-001-2026) — are technically sound additions to the regulatory architecture. The sector should acknowledge them as such.
But measured against the scale of the systemic dysfunction they are meant to address, these reforms are chapters in a long unfinished book, not its conclusion.
The transmission loss order took effect from April 13, 2026. It sets a commendable target: reduce transmission losses across all regions to no more than 6.5 per cent by December 2026.
This is down from a national average of 8.71 per cent in 2024, which had only partially improved to 7.24 per cent in 2025 — still above the 7 per cent MYTO benchmark. NISO is mandated to install smart meters at all regional interconnection boundary points by December 2026 and to submit quarterly regional loss reports. Transparency and accurate metering are foundational. Without them, no reform is auditable, and no investor is reassured.
The order is backed by the Electricity Act 2023, which gives NERC enforceable powers over efficiency and market accountability. The question is not whether the regulations are well-drafted — they are. The question is whether the structural conditions exist to honour them.
The Mini-Grid Regulations 2026 deserve equal credit as a forward-looking instrument.
The framework covers isolated mini-grids operating independently of DisCo networks, with capacity up to 5MW. It also covers interconnected systems linked to existing distribution infrastructure with capacity up to 10MW. It aligns with the Electricity Act 2023 to govern developers, operators, distribution companies, and host communities.
By formalising permit timelines, reporting obligations, and safety standards, NERC has created the kind of regulatory clarity that private capital requires before committing to off-grid electrification.
This matters enormously for unserved and underserved communities, where the national grid has essentially failed for decades.
Yet here is where honest commentary must confront hard data. The band categorisation system was introduced under the service-based tariff framework.
It was designed to link higher charges to higher service hours. Consumers in Band A, guaranteed a minimum of 20 hours of daily electricity, were subjected to tariffs closer to cost-reflective levels, with average rates exceeding ₦200 per kilowatt-hour by 2025. But the promise has been chronically dishonoured.
NERC ordered nine distribution companies to compensate customers in 557 streets across Nigeria for failing to deliver promised supply in April 2025 alone. Some areas faced daily blackouts of up to 18 hours despite Band A classification. The band system, in its current state, does not guarantee supply. It guarantees a tariff bracket.
That is an important distinction that consumers in Ikorodu, VGC, Kano, and Port Harcourt understand from lived experience, regardless of the regulatory category printed on their meters.
The deeper pathology runs upstream. Nigeria’s installed generation capacity has reached 15,500MW, yet only 5,000 megawatts can be transmitted. Actual dispatch regularly falls below 4,300MW.
Thermal plants, which account for the bulk of generation, require approximately 1,629.75 million standard cubic feet of gas per day.
As of February 2026, actual supply stood at roughly 692 MMSCF, less than 43 per cent of daily requirements.
No transmission loss regulation resolves a gas supply deficit. No mini-grid framework fixes the fact that the grid has collapsed over 160 times since privatisation in 2013.
The regrettable truth is that GAMCO and the ₦3.3 trillion GenCo debt settlement, the government’s two most ambitious structural interventions of this reform cycle have themselves not met expectations, regrettably
The grid assets management Company (GAMCO) is still in its committee and incorporation phase. It is structured to rehabilitate three idle NIPP plants; Omotosho, Olorunsogo, and Ihovbor and develop a new 330kV double-circuit transmission line along the Benin–Lagos corridor.
A projected recovery of 1,600MW within 18 to 24 months is anticipated, if the initiative proceeds as planned. That is an important conditional.
The Association of Power Generation Companies has expressed reservations about the verification parameters used to arrive at the ₦3.3 trillion figure.
Consumer rights organisations have warned that a lack of transparency could shift financial burdens onto electricity consumers through higher tariffs or indirect subsidies.
As of March 31, 2026, only 17 GenCos had signed settlement agreements covering approximately ₦2.28 trillion. Only ₦223 billion had been disbursed from Series I of the phased repayment plan. Meanwhile, GenCos report that the sector’s total indebtedness has risen to ₦6.8 trillion as of February 2026. It is projected to reach ₦8.8 trillion by December 2026. Only 35 per cent of the ₦280 billion in monthly invoices is currently being paid. The debt is being settled slower than it accumulates.
One dimension of Nigeria’s power crisis that rarely receives the policy attention it deserves is the deliberate destruction of electricity infrastructure by vandals.
Across the country, transformer theft and sabotage have become a ruinous parallel drain on the sector’s already overstretched resources.
At Odogunyan in Ikorodu, Lagos alone, over 60 transformers have been vandalised.
That figure represents not just hardware loss but the sustained deprivation of electricity to thousands of households and small businesses. Ikorodu is one of Lagos State’s most densely populated peri-urban communities.
This is not an isolated statistic. It is a pattern repeated across Agege, Mushin, Ajegunle, and countless other communities served by the Ikeja Electric Distribution Company and its counterparts nationwide. DisCos, already struggling with collection shortfalls and capital inadequacy, are compelled to divert scarce replacement budgets toward restoring vandalised infrastructure rather than expanding or upgrading their networks.
The cost is ultimately borne by the consumer, either through extended outages or through the tariff components that factor in Aggregate Technical, Commercial and Collection losses.
Some DisCos and community stakeholders have pointed to the installation of solar-powered CCTV cameras around transformer installations and grid facilities as a deterrent measure.
While this is a welcome technological step, it must be stated plainly that surveillance equipment alone will not solve the vandalism crisis. A camera that records a crime but produces no arrest, no charge, and no conviction is little more than an expensive witness.
The uncomfortable pattern across many communities is that culprits are identified, occasionally apprehended, and then quietly released.
This happens sometimes through community settlement, sometimes through institutional inertia, and sometimes through outright compromise of the process.
The cycle then repeats. Solar CCTV installations will only justify their cost and their promise when the footage they capture is consistently used as evidence in court proceedings that end in prosecution and sentencing.
Until that pipeline, from camera to courtroom is functional and credible, vandals will continue to operate with the quiet confidence of people who know that consequences are unlikely.
Consumers, for their part, must recognise that infrastructure protection is not solely the responsibility of the distribution companies.
Community vigilance, the reporting of suspicious activity around transformers and high-voltage installations, and a cultural rejection of complicity in the scrap metal trade that feeds transformer vandalism are civic obligations that no regulation can substitute.
DisCos, equally, must go beyond reactive replacement. They must invest in community-based surveillance partnerships, perimeter fencing of transformer installations, tamper-evident sealing, and real-time asset monitoring technology where feasible.
The argument that poverty drives vandalism is not without merit. But it cannot be allowed to function as a permanent excuse or a barrier to prosecution.
Where vandals are caught, they must be prosecuted to the full extent of the law.
They must not be cautioned, released on informal settlement, or allowed to return to the same communities to continue their destruction. The Electricity Act 2023 and the Criminal Code both provide sufficient legal basis for meaningful custodial sentences for electricity infrastructure sabotage. The problem has been enforcement. Law enforcement agencies, the courts, and the DisCos must collaborate to ensure that prosecution is the rule rather than the exception.
The consequence of vandalising a community transformer must be a prison sentence, not a quiet return home. The deterrence value of credible, publicised prosecution cannot be overstated in communities where impunity has become the norm.
When one vandaliser is visibly prosecuted, sentenced, and that outcome publicly communicated to the community, it sends a message that no number of awareness campaigns can replicate.
What, then, are the most credible pathways out of this epileptic power supply? The honest answer requires moving beyond regulatory orders and debt announcements into structural transformation.
Gas supply securitisation is non-negotiable. Long-term, bankable gas supply agreements that shield thermal plants from the volatility of the domestic gas market must underpin any generation recovery plan, including GAMCO’s.
Transmission reform must be matched with distribution reform. Even if GAMCO recovers 1,600MW and NERC cuts losses to 6.5 per cent, the DisCos remain technically and financially incapable of distributing that power reliably to end consumers without major capital injection and governance overhaul.
The metering gap remains critical. As of October 2025, only 56.06 per cent of active electricity customers were metered, up from 45.72 per cent in August 2024. Nearly half of consumers remain on estimated billing, which distorts revenue and undermines the entire service-based tariff rationale.
Renewable energy decentralisation through the Mini-Grid Regulations 2026 offers the most realistic near-term relief for underserved communities, but only if private developers receive the payment security and regulatory predictability they require. Above all, payment discipline must be enforced across the entire value chain — from consumers to DisCos to NBET to GenCos. No reform survives in a system that invoices ₦280 billion monthly and collects only a third of it.
NERC’s new frameworks are technically legitimate and regulatorily necessary. But regulations that outpace the financial and physical reality of the infrastructure they govern risk becoming elaborate paperwork.
Nigeria’s power sector does not need another well-written order. It needs a verifiable, time-bound, consequence-bearing implementation chain. It needs communities that protect their own infrastructure. It needs distribution companies that enforce accountability at the last mile. It needs solar CCTV cameras whose footage actually leads to courtroom convictions. And it needs a justice system willing to treat electricity vandalism as the economic sabotage it truly is.
The lights will only come on when every actor in the value chain, from the gas field to the transformer pole is held to account and when the culture of impunity that has shielded vandals for too long is finally and decisively broken.
*_Ade Adesokan is a public affairs commentator and international human rights advocate_*
