Abuja-based policy research organisation, Agora Policy, has called on the Federal Government to adopt comprehensive structural reforms to revive Nigeria’s electricity sector, warning that reliance on tariff adjustments alone will not deliver sustainable improvements.

In a policy paper released on Monday, the think tank argued that the current reform strategy, largely focused on tariff increases for high-consuming customers and periodic debt refinancing, is inadequate to address the sector’s deep-rooted challenges.

According to Agora Policy, Nigeria’s power sector requires a broad-based reset involving recapitalisation, ownership restructuring, contract enforcement, improved gas supply infrastructure, and industrial demand recovery.

The organisation noted that more than a decade after the 2013 privatisation of the power sector, electricity supply remains far below expectations, with average generation hovering around 4,474 megawatts despite an installed capacity of 13,625 megawatts.

DisCos Need Restructuring

Agora Policy recommended that the country's 11 electricity distribution companies (DisCos) be categorised according to their operational performance and financial viability.

The think tank proposed that viable DisCos should be recapitalised, struggling operators placed under management intervention or sub-franchising arrangements, while failed utilities should be restructured or re-concessioned.

It cited regulatory data showing that nearly all DisCos failed to meet their Aggregate Technical, Commercial and Collection (ATC&C) loss reduction targets, highlighting the need for differentiated interventions rather than a one-size-fits-all approach.

Gradual Phase-Out of NBET

The report also called for the gradual phase-down of the Nigerian Bulk Electricity Trading Company (NBET), arguing that its continued central role has contributed to the accumulation of financial liabilities within the sector.

Agora advised that NBET should stop entering new Power Purchase Agreements (PPAs), while existing contracts should gradually be transferred to financially capable DisCos, industrial customers, licensed electricity traders, embedded generators, and state electricity markets.

The organisation suggested that NBET should eventually function only as a stabilisation vehicle for legacy obligations before being phased out entirely.

Gas Infrastructure and Industrial Power Supply

To strengthen electricity generation, Agora proposed the creation of a gas-to-power infrastructure and industrialisation fund to support investments in pipelines, gas processing facilities, storage infrastructure, metering systems, and power plant connections.

The think tank argued that reducing the cost of delivering gas to power plants would be more effective than simply regulating gas prices.

It further stressed the need to attract industrial consumers back to the national electricity market by making grid-connected power more reliable and cost-effective than self-generation through captive power plants.

Decentralisation and State Electricity Markets

While acknowledging recent electricity sector reforms that allow states to establish their own electricity markets, Agora warned that decentralisation could lead to market fragmentation if not properly coordinated.

The organisation urged the creation of a federal-state coordination framework to harmonise tariff principles, technical standards, transmission rules, and dispute resolution mechanisms.

It also recommended establishing a federal electricity recovery vehicle to support states with limited capacity to attract private-sector investment.

Metering and Customer Database

Agora Policy identified mass metering as a critical component of power sector reform and called for a fully funded national metering and customer enumeration programme.

According to the report, comprehensive metering of transformers, feeders, and end users would reduce revenue leakages, improve planning, and enhance electricity bill collections.

The think tank also advocated the creation of a national electricity customer registry linked to unique customer identification numbers to support better service delivery and financial inclusion.

Diversifying Power Sources

The organisation further urged Nigeria to diversify its electricity supply through mini-grids, solar energy systems, battery storage solutions, and regional power networks.

It argued that the country's electricity deficit is too significant for reliance on a single national grid, stressing that multiple supply channels would improve access while preserving the financial viability of shared grid infrastructure.

Agora Policy concluded that meaningful power sector reform must go beyond tariff reviews and address the structural, financial, and operational weaknesses that continue to hinder reliable electricity supply across the country.