Nigeria’s ongoing electricity sector reforms could face major setbacks if regulatory uncertainty and weak coordination between federal and state authorities are not urgently addressed, a new report by PricewaterhouseCoopers has warned.
The report, titled “Priority Actions for the Successful Evolution of Nigeria’s Multi-Tier Electricity Market,” said the country’s transition toward a decentralised electricity system requires stronger governance structures, clearer regulatory boundaries, and improved market coordination.
According to PwC, the shift to a multi-tier electricity market with increased roles for state governments and sub-national regulators has created policy and operational tensions, especially around jurisdiction, investment certainty, and regulatory oversight.
The firm noted that overlapping mandates between federal and state institutions remain one of the biggest threats to reform success, warning that unclear transition arrangements could discourage investors and disrupt operations across the power sector.
“Regulatory clarity and federal and state alignment… As states exercise authority over intra-state electricity activities, overlap with federal institutions is unavoidable,” the report stated.
It added that where transition arrangements are inconsistent or poorly defined, uncertainty rises for utilities, investors, and consumers, stressing that agreed transition rules are critical for long-term stability.
PwC also highlighted serious structural weaknesses in Nigeria’s electricity distribution segment, including liquidity stress, legacy debt, inadequate metering, and ageing infrastructure.
The report stated that these long-standing challenges continue to weaken distribution companies and limit efficiency, despite recent policy reforms.
“Data shared by utilities and reinforced by the Honourable Minister highlighted persistent liquidity stress, legacy debt, metering gaps and ageing infrastructure,” PwC noted.
It further explained that unreliable consumption data fuels billing disputes, weakens collections, and makes regulatory decisions harder to sustain.
The report stressed that decentralisation alone would not solve the deep-rooted inefficiencies in the sector, insisting that coordinated intervention is still needed to fix the financial and operational weaknesses in power distribution.
PwC maintained that governance quality, project structure, and institutional alignment would determine whether the reforms attract meaningful investment and improve electricity access nationwide.
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President Bola Ahmed Tinubu signed the Electricity Act 2023 into law in June 2023, replacing the Electric Power Sector Reform Act 2005 and introducing a new framework for Nigeria’s post-privatisation electricity market.
One of the major provisions of the law is the removal of electricity from the Exclusive Legislative List, allowing state governments, private companies, and individuals to independently generate, transmit, and distribute electricity.
The legislation is expected to boost private sector participation, increase competition, improve service delivery, and expand access to power across the country.
However, PwC warned that without clear governance systems, stronger data frameworks, and regulatory certainty, the reform process may fail to achieve its full potential.
