Millions of Nigerians are once again living in darkness due to needless power outages amid hike in prices despite the crooked and unworkable band system meant to further polarise the wallowing gulf between the rich and the poor both in terms of social, economic contexts.
Businesses are losing revenue, factories are laying off staff, and economic activity is stifled. The blame lies with a sector long enmeshed in corruption, mismanagement, and systemic inefficiency. Generation Companies (GENCOS) and Distribution Companies (DISCOS) once again pointed to dismal gas supply as the root cause of their collective failure.
By coincidence or deliberate distraction, the federal government recently announced the creation of the Grid Asset Management Company (GAMCO), sparking debate among experts who fear a repeat of history, which is attempting to solve deep structural problems by establishing yet another institution. According to the Presidency, GAMCO is designed to provide a “quick-fix solution” to issues like stranded electricity, weak grid management, and transmission bottlenecks. An 11-member committee has been constituted to guide the company’s take-off, with the goal of recovering about 1,600 megawatts of stranded electricity within 18 to 24 months.
GAMCO’s plan involves concession agreements with the Niger Delta Power Holding Company (NDPHC), covering power plants such as Omotosho, Olorunsogo, and Ihovbor. The Transmission Company of Nigeria (TCN) is also expected to allow GAMCO to develop and operate a new 330KV double-circuit transmission line along a designated corridor. On the surface, the initiative appears attractive: stranded electricity has long plagued Nigeria, and mobilising private investment for transmission infrastructure seems practical.
Yet, many experts including this editorial remain unconvinced. The creation of GAMCO may worsen the very problem it seeks to solve, which is the proliferation of institutions in Nigeria’s electricity sector that will end up as another sinking hole.
Over the years, the power industry has undergone numerous structural reforms, beginning with the dismantling of the National Electric Power Authority (NEPA), the former state monopoly responsible for generation, transmission, and distribution. NEPA was replaced by the Power Holding Company of Nigeria (PHCN) as a transitional body to manage assets prior to privatisation. PHCN was eventually unbundled into 18 successor companies: six generation companies, one transmission company, and eleven distribution companies.
Reforms also gave rise to regulatory and specialised agencies: the Nigerian Electricity Regulatory Commission (NERC) to regulate tariffs and market compliance; the Nigerian Electricity Management Services Agency (NEMSA) to enforce technical standards; and the Nigerian Bulk Electricity Trading Plc (NBET) to buy power from GENCOS and sell to DISCOS. The NDPHC manages assets under the National Integrated Power Projects (NIPP), while the Nigeria Electricity Liability Management Company (NELMCO) handles debts and pension liabilities inherited from PHCN. The Rural Electrification Agency (REA) expands electricity access to underserved areas, and the National Power Training Institute of Nigeria (NAPTIN) develops technical capacity. Meanwhile, the Bureau of Public Enterprises (BPE) oversaw privatisation, and initiatives such as the Presidential Power Initiative and the FGN Power Company were introduced to bridge infrastructure gaps.
Despite this complex institutional network, Nigeria generates roughly 4,000 to 5,000 megawatts of electricity for over 200 million people, scandalously low for Africa’s largest economy. By comparison, South Africa, with a population of 60 million, has over 40,000 megawatts of capacity, while Egypt, with roughly half of Nigeria’s population, produces more than 40,000 megawatts. These comparisons highlight the enormity of Nigeria’s electricity deficit and raise questions about the effectiveness of repeated reforms.
GAMCO’s creation in addition to others like the Nigerian Independent System Operator (NISO), therefore, prompts critical questions: How will it fit into an already crowded landscape? What happens to existing initiatives like the Presidential Power Initiative and the FGN Power Company? How will it coordinate with TCN, the Nigerian Independent System Operator, and other stakeholders? Crucially, is there anything GAMCO can achieve that existing institutions cannot?
When responsibilities overlap and mandates are unclear, bureaucratic competition replaces coordination, leading to confusion, inefficiency, and rising administrative costs. Nigeria’s electricity sector does not suffer from a shortage of agencies but from weak governance, poor coordination, and inadequate infrastructure.
Transmission remains the sector’s most critical bottleneck. Even when power plants generate electricity, the grid often lacks capacity to deliver it efficiently. Instead of creating more agencies, the government should focus on strengthening TCN and modernising the national grid.
Structural issues also persist. Gas shortages continue to constrain many plants, despite Nigeria possessing some of the world’s largest reserves. Policies that ensure gas is available to generation companies in naira rather than dollars, alongside dedicated supply arrangements, could stabilise generation. Hydropower is underutilised due to poor water management; better reservoir control could significantly increase output. The recently amended Electricity Act offers state governments an opportunity to participate in generation and distribution, yet few have taken advantage.
Alternative models, such as the Aba Power arrangement, show promise as it is dedicated local generation and distribution which provides relatively reliable electricity. Cluster-based or regional power systems could reduce the country’s overreliance on a fragile national grid that will never work.
Ultimately, Nigeria’s electricity crisis is a socio-economic challenge of the highest order. No modern economy can industrialise without reliable power. Manufacturing, research, job creation, and technological innovation all depend on electricity. For decades, billions of naira has been invested in the sector with minimal improvement. Nigerians are justified in asking whether solutions lie in creating more agencies or in making existing institutions function effectively.
SOURCE: DailyTrust