Why Price Controls Are Tanking Nigeria’s Power Sector

Only 59 percent of Nigerians have access to grid electricity. Those who do suffer nearly 33 outages per month and get power for just 35.8 hours a week. That failure is driven by government price caps on distribution companies. Regulators currently limit what DISCOs can charge. But real cost-reflective rates could range from ₦120 to ₦300 per kWh based on supply risks and investment needs. Just like mobile network operators once charged high sim-card fees to finance infrastructure before prices tumbled, power companies need cost-reflective tariffs to attract the $120 billion investment required. High initial rates would reward early users like factories and hospitals, drive wider grid expansion and eventually lower prices for everyone. Until tariffs match real costs, rural communities will keep relying on expensive generators or off-grid mini-grids. Only by removing artificial price limits can Nigeria finally deliver reliable, affordable electricity.

Use The App To Win ₦1m

Stories are shared by community members. This article does not represent the official view of NaijaWorld — the author is solely responsible for its content.