Nigeria’s investment-lean power sector
The Federal government is calling for an ambitious $10 billion in private sector investment over the next five to ten years to address the nation’s chronic power supply problems. This appeal, made by the Minister of Power, Adebayo Adelabu, in a recent meeting with the Director-General of the Infrastructure Concession Regulatory Commission (ICRC), Dr. Jobson Ewalefoh, underscores the gravity of the country’s energy crisis and the urgent need for a sustainable solution.
At the heart of this call is the recognition that the government alone cannot shoulder the financial burden of overhauling Nigeria’s power infrastructure. Despite the critical importance of electricity to economic development, the sector’s many challenges—ranging from ageing infrastructure to inadequate funding—require a new approach. For years, the state-owned power sector has struggled to provide consistent and reliable power supply to Nigerians, limiting economic productivity and stunting the growth of businesses. With the government already stretched across various priorities, it is clear that private sector investment is the key to realising the goal of 24-hour power supply.
Minister Adelabu’s statement is not just a recognition of the financial gap in the power sector; it is also a pragmatic acknowledgment that solving Nigeria’s energy crisis requires collaboration between the public and private sectors. As he pointed out, the government must retain an interest in the sector while leveraging the private sector’s financial capabilities and expertise. This is where the role of the ICRC becomes indispensable.
The ICRC, under Dr. Ewalefoh’s leadership, has long advocated for the expansion of public-private partnerships (PPPs) as a means to unlock much-needed funding and expertise in key sectors of the Nigerian economy, particularly power. With its regulatory capacity, the commission aims to create a conducive environment for private investors to participate in the power sector, ensuring that investments are not only attracted but also protected from risks that might arise from regulatory or operational inefficiencies. This structured partnership, often through concession arrangements, offers a pathway to modernise and expand Nigeria’s power infrastructure without overburdening the federal government’s budget.
The need for private investment is particularly pressing when one considers the scale of Nigeria’s power sector shortfall. Years of neglect, poor planning, and insufficient investment have left the country with an energy deficit that limits industrial growth, hampers job creation, and undermines the quality of life for millions of citizens. As Dr. Ewalefoh highlighted, the investment required to revamp the sector is substantial, and the process is long-term—requiring careful planning and strategic execution. This is not a challenge that can be solved overnight, but rather one that demands a sustained effort over the course of a decade, if not longer.
The government’s decision to involve the private sector, through PPPs, is a step in the right direction. However, it will require more than just regulatory frameworks. For the ICRC to successfully attract and manage private investments, it will need to demonstrate its commitment to robust governance, transparency, and accountability. Foreign investors will be looking for assurances that their investments are protected and that returns are not stymied by bureaucratic inefficiencies or policy instability. The commission’s recent six-point policy direction is a positive move in this regard, as it streamlines the process for PPP investments and aims to reduce delays or complications in service delivery.
But there are also broader questions that must be addressed. How will the government balance the interests of private investors with the need to provide affordable and accessible power to ordinary Nigerians? Will these investments lead to improvements in service delivery, or will they simply further entrench the dominance of powerful corporate entities at the expense of the public? These are important issues that will require careful oversight and regulation, ensuring that private sector participation does not compromise the social responsibility of providing power to all citizens.
The urgency of revitalising the power sector cannot be overstated. Nigeria’s economic potential is inextricably linked to its ability to generate and distribute reliable power. With the right investments, Nigeria has the opportunity to transform its energy landscape, spurring economic growth, creating jobs, and improving the standard of living for its people. But this will only happen if the government, the private sector, and regulatory bodies like the ICRC work together in a spirit of collaboration and mutual benefit.
While it is true that the Federal Government’s appeal for $10 billion in private investment is a bold step towards addressing Nigeria’s power sector crisis, the road ahead will be challenging, but with clear strategies, effective regulation, and strong partnerships, we can lay the groundwork for a more reliable and sustainable energy future. The time for action is now, and the private sector has a vital role to play in powering Nigeria’s growth.
