Constitutional and Institutional Governance of Electricity Sector in Nigeria

Abstract

The extensive reform of Nigeria's power industry is focused on deregulation, restructuring, and privatisation. The government started a comprehensive economic reform programme in 1999, which includes this reform. The National Electric Power Policy (NEPP) of 2001 and the Electric Power Sector Reform (EPSR) Act of 2005 both first stated the need for privatising the electricity sector. The privatisation of the entire energy sector made considerable strides in 2013 with the transfer of ownership of six electricity production businesses and eleven electricity distribution companies. The reform has led to the repeal of the EPSR Act 2005 by the enactment of the Electricity Act 2023. This paper therefore seeks to ensure that a reform process is not only set up but prioritized within the Electricity sector. With the passage of the Privatisation and Commercialization Act in 1988 and the subsequent creation of the Technical Committee for Privatisation and Commercialization (TCPC) in 1993, the reform process got underway. When civilian authority was restored in 1999, the government passed the Public Enterprises (Privatisation and Commercialization) Act, which established the National Council on Privatisation (NCP) as the top policy-making body on privatization-related matters. The Bureau for Public Enterprises (BPE) was created under the Act to serve as the government's technical operator and task manager for its public enterprise reform initiative. The reform legislation calls for licencing, liberalisation, the unbundling of the public monopoly utility, corporatization, and the commercialization of successor enterprises. The Power Holding Company of Nigeria (PHCN) was established as a holding company. To ensure a competitive electricity market, the law suggests selling generating and distributing enterprises to core investors. Despite privatisation attempts, Nigeria's electrical supply reliability remains a serious difficulty, and regulation remains an urgent issue. Due to the inconsistent availability of energy, manufacturers continue to rely primarily on diesel generators. Power plant failures have resulted in significant electrical shortages, with daily power outages lasting several hours. Conclusively, while the Nigerian power sector has undergone significant reforms, there is still a need for further improvements in regulation and electricity supply reliability to address the country's persistent energy challenges and support economic diversification beyond oil production and manufacturing sector collapse.