FG considers handing over power utilities to state governments

The Nigerian government says it is contemplating transferring its ownership of 11 power utilities to state governments as a measure to enhance supervision and end the persistent power shortages in the country.

The Minister of Power disclosed on Friday that the federal government currently holds a 40% stake in these 11 power distribution companies (DISCOs), which were privatized a decade ago, and each operates a franchise covering three or more states.

Minister Adebayo Adelabu pointed out that the federal government is open to exchanging its shares in the DISCOs for shares in the privately managed Niger Delta Power Holding Co, a distinct power firm jointly owned by states and local governments.

“We are committed to collaborating closely with the state ministries of power to tackle challenges in the distribution segment, considering its retail nature,” Adelabu said in a post on X.

President Bola Tinubu, spearheading some of Nigeria’s most significant reforms in decades, has approved new legislation permitting state governments to produce and distribute power. This marks a departure from the previous law, which granted exclusive rights for these activities solely to the federal government.

Nigeria, Africa’s most populous nation of more than 200 million people, produces a fraction of its installed power generation capacity of 12,500 megawatts, leaving millions of households and businesses reliant on generators for electricity.

All eyes are on the current administration to initiate the right chance to give the needed electricity stability to enhance its socio-economic growth.