The year 2024 witnessed some highlights events in the Nigeria’s power sector, juggling significant gains with persistent challenges that underscored the complexity of the country’s energy landscape. As one of the largest economies in Africa, Nigeria depends heavily on its energy industry to propel its development. However, the previous year has revealed how the sector is still shaped by a complex dance between advancement and enduring difficulties. One of the year’s notable milestones was the reported 16% increase in available generation capacity during the third quarter, according to the Nigerian Electricity Regulatory Commission (NERC).
Starting from the beginning of the year, in February, President Bola Ahmed Tinubu signed the Electricity Act (Amendment) Bill 2024 into law. Several people were optimistic about this law, which requires electricity firms to donate 5% of their real yearly operating expenses from the previous year to the improvement of their host communities. Also, the Ministry of Finance Incorporated (MOFI) formally restructured and assumed control of the government’s 40% ownership stake in the 11 successor Electricity Distribution Companies (DisCos) that had been privatized.
Many were left dissatisfied with inadequate power supply.
Alongside this, sharp tariff increases further strained the relationship between power providers and consumers, when the federal government announced in March that electricity Subsidies would no longer be provided, for Band A feeder customers—who were promised better supply. Many Nigerians were left dissatisfied as they tried to balance exorbitant prices with persisting inadequate Power Supply after rates increased by more than 200%, from ₦66 to ₦225 per kilowatt-hour. Despite public uproar and protests over the sharp increase in pricing, the government argued that the withdrawal of the subsidy was required to improve supplies and enable it to pay off its growing debt in the utility sector.
Even with the price hike, power supply was inadequate and the Nigerian government was unable to reach its goal of producing 6,000 megawatts of power by the end of 2024. As Power Generation has been continuously below 5,000 megawatts, impacting the provision of electricity for more than 200 million people, Nigeria obtained a $500 million Loan from the World Bank in June to improve its electricity sector, specifically to increase power distribution. The loan was aimed to improve the technical and financial performance of DISCOs companies who have been having trouble growing their capacity since the industry was privatized more than ten years ago.
Vandalism made distribution operations challenging.
Similarly, in July, the United States Agency for International Development (USAID) and the federal government signed a Memorandum of Understanding (MoU) worth ₦115.2 billion to help the nation’s efforts to produce electricity from cleaner sources and promote ongoing reforms in the power sector. Nevertheless, Nigeria’s government recorded high financial spending in 2024, which was reflected in an astounding rise in subsidy expenditures. The government spent ₦1.283 trillion on subsidies between January and November, a 204.15% increase in comparison to the ₦628.61 billion spent in 2023.
Furthermore, the national grid remained vulnerable throughout the year, with 13 confirmed collapses, highlighting serious Infrastructure flaws that continue to impair the reliability of energy. Another major obstacle that surfaced was infrastructure vandalism, which made distribution operations even more difficult due to extensive damage to vital infrastructures. Efforts to reach targets for Renewable Energy also fell short, especially in the development of solar energy. Despite these obstacles, efforts were made to improve the industry. The 2023 Electricity Act, which granted oversight functions to states, offered a potential solution to some of the sector’s governance and operational issues.
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As of December, eight states—including Lagos, Ogun, Enugu, Kogi, Ondo, Ekiti, Oyo, and Imo—had been granted regulatory oversight for electricity operations, signaling a shift towards decentralization that may improve service delivery. In summary, Nigeria’s electricity sector saw both major advancements and enduring challenges in the year 2024. While financial investments and legislative changes were intended to address long-standing problems, operational setbacks and infrastructure shortcomings persisted in impeding a steady and reliable supply of energy nationwide.