NAIRAMETRICS
President Bola Ahmed Tinubu has officially signed the 2023 Electricity Act into law, marking a significant milestone in Nigeria’s electricity sector.
While the immediate impact on the average Nigerian in terms of increased electricity access may be limited, the new law focuses on enhancing the regulation and management of the electricity value chain. One of its key provisions includes the removal of obstacles that hinder the efficient operation of state electricity market systems.
This move is expected to pave the way for improved governance and better overall performance in Nigeria’s electricity industry.
The Nigerian Electricity Regulatory Commission (NERC) has been empowered to address post-privatization issues more effectively than before. However, the positive impact of this law will only be felt when all the states in the federation establish their own electricity laws.
According to the Chief Executive Officer of New Hampshire Capital Limited, Odion Omonfoman told Nairametrics that this process consists of three steps. The first step, which was initiated by former President Buhari, involved a constitutional amendment to allow states to generate, distribute, and transmit electricity.
The second step has been taken by President Tinubu, who signed the Electricity Act into law. The third step will be when all states in the country establish their own electricity laws to govern the sector.
Until states begin developing their own electricity laws, the distribution and power generation companies will continue to operate uniformly across all states. To ensure greater access to electricity for all Nigerians, it is crucial for states to start working on their individual electricity laws.
86 million Nigerians are currently without electricity access
According to a report released in June 2023 by the International Energy Agency (IEA) and other organizations, it was revealed that as of 2021, 86 million Nigerians lack access to electricity. The report further highlighted that the sub-Saharan African region is home to 80% of the population without electricity access.
The report also pointed out that Nigeria and other sub-Saharan African countries face various challenges, including limited financing, insufficient risk mitigation resources, financially unsustainable utilities, and the absence of local financial institutions with expertise in access-related matters. These factors collectively undermine the feasibility of electricity access projects.
2023 Electricity Act could change this scenario
However, if the 2023 Electricity Act is effectively implemented and states take the initiative to develop and enforce their own electricity laws, it has the potential to positively impact the 86 million Nigerians currently without electricity access.
