The Struggle for Reliable Power in Nigeria
In early 2019, the Federal Government was deeply engaged in addressing the persistent challenges of poor power supply and inefficiencies within the electricity sector. At that time, the solutions being explored were largely driven by private sector initiatives. These efforts required significant capital investment and expected active participation from citizens, particularly due to the long-standing subsidies that had been a part of the sector.
The government pursued the Siemens deal as a major initiative aimed at tackling the unreliability of power supply in Nigeria. This agreement was seen as a crucial step forward, with the former Chief of Staff to the President leading several delegations to Germany to ensure its successful implementation. Following numerous reports from the Presidential Power Initiative (PPI), an agreement was eventually signed, giving many Nigerians hope that the sector’s longstanding issues were on the verge of resolution.
The Objectives of the Presidential Power Initiative
The primary goal of the PPI was to increase Nigeria’s operational grid capacity from approximately 4,500–5,000 MW to 25,000 MW by 2025. The late Abba Kyari, who chaired the committee, played a pivotal role in driving this vision. The initiative was structured into three distinct phases:
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Phase 1 was scheduled to begin in 2020 and last for one year, aiming to raise the operational grid capacity to 7,000 MW. This phase included upgrading and expanding 11 key transmission stations and adding 10 new mobile substations to stabilize the grid and alleviate overloaded transmission lines.
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Phase 2, planned between 2021 and 2024, aimed to increase the operational grid capacity to 11,000 MW. This phase would have involved constructing new 33/11kV injection substations and rehabilitating thousands of distribution transformers.
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Phase 3 was intended to achieve 25,000 MW of operational capacity between 2024 and 2025, involving extensive construction and linking new generation projects such as the Mambilla Hydro Plant (if completed) to the national grid.
However, Nigeria was unable to complete even 100% of Phase 1. Major setbacks included the COVID-19 pandemic, which initially stalled progress in 2019, and the death of Abba Kyari, who had championed the initiative.
Addressing Payment Systems and Subsidies
During the NERC consultative forum held with the 11 distribution companies (DisCos) in 2019, the focus was on gathering customer feedback on the payment system after acknowledging the unsustainability of subsidies in the sector. While subsidy was not the only challenge affecting the DisCos or national power reliability, it remained a significant factor.
NERC also worked on issues such as government debts, energy metering, and union matters. However, the particular consultative forum aimed to address payment culture and bring investors, operators, and consumers together.
After the consultations, which took place across all states, customers unanimously agreed that only when the DisCos improved electricity reliability would they support any increase in electricity tariffs. Based on this, NERC reviewed its policies and developed a new framework, the categorization of customers into different Bands (A–E). Each Band reflected the actual cost of power. The framework was intended to increase revenue for DisCos, enable them to strengthen their networks, provide more power to high-paying customers, and ultimately improve power reliability nationwide. However, due to the complexity of the Nigerian system and weak political will, full implementation proved difficult.
The Reflective Tariff System and Its Challenges
Eventually, the new Minister of Power, Bayo Adelabu, adopted the policy as a crucial step in improving the electricity sector. On April 3, 2024, NERC officially announced a significant increase in the electricity tariff for Band A customers only. The Minister defended the decision across multiple fora, emphasizing the unsustainable nature of subsidies and their negative impact on the national economy.
While the reflective tariff system was designed to align with the goals of the Presidential Power Initiative, it has not yet achieved its intended results.
Current State of Power Supply in Nigeria
As of September 2025, according to the NERC Operational Performance Factsheet, Nigeria had an average of 5,200 MW available for dispatch out of 13,625 MW of installed capacity, with 4,091 MWh/h utilized. The Egbin Power Plant, the country’s largest, operated at only 46% of its capacity.
The failure of the PPI has left the nation stagnated at roughly the same energy capacity it had in 2019, despite enormous investments in the sector. This has caused public discontent, as many Nigerians who once supported tariff increases now feel unfairly treated. If the government had achieved the targeted 25,000 MW from Phase 3, Nigeria would have enjoyed unprecedented power reliability.
Protests and Unfair Tariff Structures
The failure of the PPI and the selective implementation of the Band A tariff have sparked a series of protests against both the DisCos and the government. Many perceive the disparity as unjust, paying ₦225 per kWh in one area while others pay ₦73 and still enjoy longer supply hours. A mere four-hour difference in supply does not justify a 204% tariff increase.
The Federal Government could have adopted a gradual, reflective tariff increase across all Bands instead of focusing solely on Band A. The current approach is unfair, especially for customers unintentionally connected to 33kV feeders. For instance, the Aramoko 33kV feeder in Ekiti State serves both rural communities and parts of Ado-Ekiti. Yet, rural customers pay more despite having less access to power.
If the government had fulfilled its part of the agreement, ensuring consistent power supply, the reflective tariff system could have been implemented more fairly. The current structure of the power network prevents customers from choosing their supply source unless they go off-grid, which remains prohibitively expensive.
The Way Forward
The government must review the current electricity tariff categorization pending the achievement of stable, nationwide power supply. A fair, evenly adjusted tariff system across all Bands is essential for public confidence.
Former President Muhammadu Buhari had a clear vision for the power sector, which led to the Nigeria–Siemens deal. Unfortunately, challenges from 2020 and the lack of seriousness among cabinet members following Abba Kyari’s death hindered its realization. The agreement offered a comprehensive approach, combining generation, transmission, and distribution reforms. Prioritizing this framework, whether by the previous or current administration, could have transformed the sector.
Ironically, the gradual withdrawal of private companies from the national grid has brought temporary stability, but it also underscores government failure to deliver adequate power.
Since the assumption of office by President Bola Ahmed Tinubu, there has been no clear, aggressive focus on the power sector. Given his reputation for bold leadership and decisive action, Nigerians expected stronger accountability for underperforming officials.
As it stands, the government must make a decisive move on the reflective tariff system to correct the current imbalance while revisiting the Siemens deal framework initiated under Buhari’s administration. Achieving 25,000 MW of generation capacity today would not only stabilize the sector but also create a fair tariff system, ensuring that government, investors, regulators, and citizens all achieve their desired outcomes.
The path forward lies in restoring policy consistency, reviving the Siemens blueprint, and ensuring every Nigerian enjoys reliable and affordable electricity. Only then can the power sector become a true enabler of national growth rather than a recurring national frustration.
