Bloomfield Law Practice on Nigeria’s power sector post-privatisation

The privatization of Nigeria's power sector about nine years ago was meant to bring efficiency and improvements to the country's energy landscape. However, recent calls for a review have surfaced following the crisis in the Ibadan, Abuja, and Yola Electricity Distribution Companies, shedding light on the challenges still facing the sector. Ayodele Oni, a Partner at Bloomfield Law Practice, shared insights on the gains and setbacks in the industry since privatization. While some progress has been made, there are lingering issues that need to be addressed for the sector to truly thrive. One of the notable gains since privatization is a reduction in estimated billing, with some private homes and companies now receiving actual metered bills. Additionally, privatization has helped in moving away from government management of the sector, allowing for more efficient operations. However, the overall improvement has been marginal, with challenges such as low tariffs, liquidity issues, and distribution companies struggling to reduce technical commercial losses still prevalent. In terms of the Distribution Companies (Discos), Oni highlighted that the privatization structure for them may need a review, as the expected reduction in technical losses has not been achieved significantly. Factors such as low tariffs, inadequate metering, and challenges in revenue collection have hindered the performance of the Discos. Looking ahead, there is an increasing argument for a decentralized grid, with states exploring the possibility of generating their own power. Oni supported this idea, emphasizing that a decentralized system could lead to better power availability and support economic growth. However, he noted the importance of engaging in political, technical, and regulatory discussions to ensure a successful transition to a more decentralized power system. Ultimately, the road to a robust and reliable power sector in Nigeria post-privatization requires a collaborative effort from stakeholders at the federal, state, and local levels. By addressing key issues such as tariff adjustments, improved infrastructure, and promoting decentralized power generation, Nigeria can unlock its energy potential and drive sustainable economic development.