PwC report highlights transition hurdles in Nigeria’s multi-tier power market

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Key Points

• A new report from the PwC Annual Power & Utilities Roundtable reveals that over 15 states are now activating local electricity markets.
• The report tracks a significant sector revenue increase to approximately ₦1.7 trillion in 2024, despite persistent liquidity challenges.
• Distribution companies (DisCos) continue to face severe financial stress, with industry-wide technical and collection losses averaging 34% to 35%.
• Findings indicate a massive metering gap remains, though federal initiatives aim to deploy 13 million meters over the medium term.
• PwC analysts emphasize that the success of the Electricity Act 2023 depends on “execution discipline” and alignment between state and federal regulators.

Main Story

A comprehensive report released following the PwC Annual Power & Utilities Roundtable provides a critical assessment of Nigeria’s shift toward a decentralized energy landscape.

The document details how the nation is transitioning from a centrally managed system to a multi-tier market, driven by the Electricity Act 2023.

While the report acknowledges that this shift brings decision-making closer to local consumers, it warns of “dual regulatory interfaces” that could complicate operations for utilities spanning multiple states.

The data presented in the report shows that while generation capacity has reached new peaks, transmission reliability and aging infrastructure remain significant bottlenecks. For businesses and residents, the promise of state-led electricity markets is currently tempered by high interest rates and technical inefficiencies.

According to the report, the next phase of Nigeria’s energy reform will be defined by the ability of stakeholders to bridge the gap between policy ambition and practical, disciplined execution.

The Issues

The report identifies a critical liquidity crisis, noting that DisCos struggle with legacy debts and collection efficiencies that hover around 70%^.

PwC highlights the risk of regulatory overlap as states establish their own commissions, which may create reporting friction for investors^.

Findings show that much of the distribution network is hampered by overloaded transformers and deteriorated feeders, leading to revenue leakage^.

The report calls for an urgent transition to cost-reflective tariffs and full digitization of metering to ensure the sector’s financial viability^.

What’s Being Said

“The success of Nigeria’s multi-tier electricity market will depend on sustained collaboration, disciplined execution and coordinated action across the entire electricity value chain.” — Pedro Omontuemhen, Partner, PwC

“Decentralization reshapes regulatory relationships but does not, on its own, resolve distribution sector challenges.” — PwC Roundtable Report

What’s Next

• The report anticipates more states will complete the transfer of regulatory oversight from NERC to local commissions in the coming months.
• Accelerated rollout of the Presidential Metering Initiative (PMI) is expected to target millions of customers currently on estimated billing.
• PwC suggests that attracting private capital will be essential to addressing the infrastructure deficit identified in the report.
• Federal and state regulators will need to harmonize policies to prevent legal conflicts as the decentralized model matures.

Bottom Line

Execution Focus. The PwC report concludes that while the legal framework for decentralization is a milestone, the sector’s survival hinges on resolving the deep-seated liquidity and infrastructure crises^.