Is real energy sector reform possible in poly-crisis Nigeria?

While the economic logic of the subsidy cuts, devaluation and other reforms enacted after Bola Ahmed Tinubu took over on Aso Rock in mid-2023 was clear, the consequences of the president’s reforms have caused immense difficulties for a majority of Nigeria's estimated 226m population.

The Tinubu administration has its work cut out to persuade Nigerians that the pain of (still only partially implemented) economic reforms can be replaced by growth and wider prosperity.

In the power sector, C&I investments from large private sector players are advancing as are some electrification and off-grid schemes but the industry remains mired in critical liquidity issues. Despite the first significant addition to the Nigerian grid by an independent power producer (IPP) in almost six years – Geometric Power's 141MW Aba gas-to-power (GTP) scheme – many IPPs will be reluctant to invest in additional capacity until the large amounts they are owed are repaid and thorny issues of cost-reflectivity and the technical limitations of a vastly inadequate transmission network look closer to resolution.

 

Transmission company of Nigeria

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