Nigeria’s Power Sector: A Century Of Institutionalized Failure And The High Cost Of Darkness

By Engr. Hassan Husaini mni

NEWSDAILYNIGERIA: The story of Nigeria’s electricity crisis is one of broken promises and systemic plunder, tracing its roots to colonial exploitation and culminating in modern-day oligarchic control. When the British installed Lagos’ first 60kW generator in 1896 – rationing power to African neighborhoods while keeping European quarters illuminated – they established an energy apartheid that would evolve into today’s catastrophic failure. This discriminatory foundation shaped all subsequent “reforms,” from the creation of the Electricity Corporation of Nigeria in 1950 to the formation of the National Electric Power Authority (NEPA) in 1972, an entity Nigerians would sarcastically rename “Never Expect Power Always.”

By the dawn of democracy in 1999, NEPA’s infrastructure was clinically dead. Seventy-two percent of equipment was obsolete, technical losses reached 40%, and government agencies owed ₦87 billion in unpaid bills. Nigeria generated a paltry 1,750MW for 120 million citizens – South Africa, with one-third the population, produced ten times more. Industries hemorrhaged $1 billion annually on diesel generators while ordinary Nigerians languished in darkness. This was the context for President Obasanjo’s $16 billion National Integrated Power Project (NIPP), which became Nigeria’s first grand electricity heist. Forensic audits would later reveal ₦1.2 trillion ($8 billion) disbursed without competitive bidding, with phantom contracts awarded to companies like Pivot Engineering ($78.6 million) and Chrome Consortium ($74.8 million). Of 45 planned power plants, only 13 materialized, most never generating a single watt. When President Yar’Adua ordered an investigation in 2007, critical documents vanished from power ministry vaults. The UK House of Commons would later trace ₦480 billion ($3.2 billion) to offshore accounts in the British Virgin Islands. No convictions followed.

This culture of impunity set the stage for the catastrophic 2013 privatization under the Electric Power Sector Reform Act. Marketed as liberalization, it became an elaborate scheme to transfer national assets to political cronies. The Ikeja Distribution Company went to NEDC/KEPCO Consortium, linked to Lagos political dynasties. Eko DisCo was handed to West Power & Gas, whose directors included proxies of a sitting senator. The Afam Generation Company went to Taleveras Group, an oil trading firm with no power sector experience but deep connections to petroleum sector patronage networks. These “investors” submitted laughable financial credentials – some with as little as ₦10 million ($63,000) in share capital for assets worth billions. Port Harcourt DisCo’s “winner,” Power Consortium, presented audited statements showing ₦45 billion liquidity; forensic reviews revealed just ₦217 million in actual holdings. The Bureau of Public Enterprises approved these fraudulent bids while disqualifying qualified international operators like Manitoba Hydro on manufactured technicalities.

A decade after this privatization charade, the results are catastrophic. Generation remains paralyzed at 4,000MW – less than Senegal’s output on a per capita basis. Distribution losses hit 55%, the highest globally. Government subsidies to these private oligarchs exceed ₦3.3 trillion ($7.3 billion) since 2015. The ultimate insult comes in Nigeria’s electricity tariffs – among the world’s highest despite abysmal service. The April 2024 MYTO hike imposed ₦225 per kWh on Band A consumers, exceeding rates in Germany (₦210) and the UK (₦195), nations with 99.9% reliability. Nigerians pay more than South Africans (₦128) and Ghanaians (₦98) for infinitely worse service. Even war-torn Libya (₦75) and sanctions-crippled Iran (₦50) charge far less for more reliable power.

This pricing insanity stems from a broken financial model where distribution companies recover only 23% of revenue due to rampant theft (43% of power is illegally tapped) and managerial incompetence (80% lack functional meters). The government then plugs the gap with ₦540 billion in annual subsidies, creating a vicious cycle where citizens pay exorbitant tariffs that vanish into black holes, then pay again through taxes funding these subsidies. Senate hearings revealed DisCos maintain “strategic outage schedules” to protect the $14 billion generator import business controlled by the same oligarchs.

Three scandals perfectly encapsulate this institutionalized looting. The $6 billion Mambilla Hydro Project became Nigeria’s most expensive ghost. Awarded in 2003 by Minister Olu Agunloye without due process, President Obasanjo immediately repudiated the contract. Yet Sunrise Power secured a 2012 re-award under President Jonathan. When Buhari canceled it in 2017, Nigeria found itself facing a $2.3 billion ICC lawsuit. During arbitration, Obasanjo testified the original contract was backdated, while former Attorney General Michael Aondoakaa admitted taking $5 million bribes. EFCC uncovered $33.8 million diverted to shell companies by Power Minister Saleh Mamman. Twenty-two years later, Nigeria faces financial ruin for a project that never broke ground.

Siemens epitomizes Nigeria’s corruption recycling plant. Its $120 million contract to upgrade Afam Power Plant in 2000 collapsed after $50 million was traced to officials’ offshore accounts. Yet in 2019, the same company secured a $2 billion “grid rescue” contract. Four years later, it delivered just 1,000MW of the promised 7,000MW, blaming the same gas shortages its contract failed to address. Similarly, the $200 million Presidential Metering Initiative failed when contracts went to DisCo owners’ proxies, perpetuating estimated billing rackets.

The human cost is apocalyptic. Forty-two percent of primary healthcare centers lack reliable power, spoiling 23 million vaccines annually. Seventy-four percent of public schools rely on toxic kerosene lamps, causing 28,000 child respiratory deaths yearly. Manufacturers spend 40% of production costs on generators, triggering 1.2 million job losses since 2020. Nigeria’s darkness isn’t an accident – it’s orchestrated theft.

Breaking this cartel requires revolutionary action. First, invoke Section 74 of the EPSRA to revoke non-performing DisCo licenses. Second, establish a Special Tribunal to prosecute NIPP and Mambilla fraud, confiscating assets as with the P&ID case. Third, redirect subsidies to solar cooperatives like Lagos’ successful 80MW project. Fourth, criminalize pipeline vandalism as economic sabotage. The solutions exist – what’s missing is the political will to implement them. Until Nigeria jails electricity looters, citizens will continue paying for light they never see, trapped in darkness by design.