PricewaterhouseCoopers (PwC), a leading investment and economic consultancy firm, has reported that for the Nigerian government to achieve its target power generation and distribution target, the nation’s ongoing electricity sector reforms require a clearer regulatory frameworks and stronger coordination between federal and subnational governments.
The consulting firm, in its new report titled “Priority Actions for the Successful Evolution of Nigeria’s Multi-tier Electricity Market”, noted that growing policy and operational tensions in the power sector as reforms continued to deepen, particularly around jurisdiction, investment certainty, and market coordination.
Specifically, PwC reported that regulatory uncertainty and overlapping mandates between federal and state authorities remained one of the biggest risks to Nigeria’s electricity reforms, stressing that without clear rules, the transition to a de-centralised electricity market could create confusion for operators and investors.
The firm further clarified: “Regulatory clarity and federal and state alignment… As states exercise authority over intra-state electricity activities, overlap with federal institutions is unavoidable.
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“Where transition arrangements are unclear or inconsistent, uncertainty rises for utilities, investors and consumers. Clear boundaries and agreed transition rules provide the foundation on which all other elements of reform depend.
“Data shared by utilities and reinforced by the Honourable Minister highlighted persistent liquidity stress, legacy debt, metering gaps and ageing infrastructure.
“Where consumption data is unreliable, billing disputes persist, collections weaken and regulatory decisions become harder to sustain”, the firm added.
PwC maintained that clarity in governance, data systems, and transition rules remained crucial to stabilising the ongoing reform process.
Beyond regulatory overlap, PwC listed some structural weaknesses in the electricity distribution value chain as major constraints hampering adequate liquidity, efficiency, and investor confidence despite ongoing policy measures to achieve the reform goals.
It also highlighted in the report that decentralisation alone would not resolve long-standing inefficiencies in the power sector as liquidity challenges continued to weaken the DisCos, legacy debt and inadequate metering constituted unresolved structural constraints; ageing infrastructure continued to limit service reliability; and investment outcomes depended heavily on governance quality and project structure.
