The Federal Government has announced plans to penalise underperforming electricity distribution and generation companies (DisCos and GenCos) as part of efforts to improve power supply and support Nigeria’s industrialisation.
Minister of Power, Joseph Olasunkanmi Tegbe, disclosed this in a policy brief presented by his Special Adviser, Martins Olajide, at the NESG Industrialisation and Competitiveness Forum on Wednesday.
Tegbe said the ministry would introduce performance scorecards for power sector workers, DisCos and GenCos, with incentives for excellence and sanctions for poor performance.
According to him, the scorecards will strengthen accountability across the electricity value chain and ensure operators meet clearly defined performance standards.
The minister also announced plans for tariff reforms designed to protect vulnerable consumers while ensuring that electricity supply obligations are met across the sector.
He said the measures formed part of an eight-point agenda aimed at stabilising the power value chain, restoring market discipline and improving governance.
Tegbe said Nigeria currently has 13,625 megawatts (MW) of installed grid capacity, but average daily available capacity is only 4,854MW, leaving about 62 per cent of installed capacity idle despite peak demand estimated at about 20,000MW.
“The power arithmetic does not add up,” he said.
He noted that the persistent gap between electricity supply and demand had forced households and businesses to increasingly rely on self-generation.
According to Tegbe, Nigerians spent an estimated N16.5 trillion on self-generated electricity in 2023, compared with about N1 trillion in revenue generated by the national grid.
Citing World Bank estimates, he said inadequate electricity supply costs the Nigerian economy about $25 billion annually, equivalent to between five and seven per cent of the country’s gross domestic product.
The minister said improving the performance of electricity operators and reforming tariffs were critical to creating a more reliable power market capable of driving industrial productivity.
He added that the government would strengthen key transmission corridors, including Lagos, Enugu-Port Harcourt and Abuja-Kaduna-Kano, with Lagos serving as a pilot for the broader grid stabilisation programme.
Tegbe said the ministry would also pursue measures to reduce technical and commercial losses, expand electricity metering and optimise generation and transmission assets through targeted economic clusters and corridors to improve utilisation and attract investment.