Former Chairman of the Nigerian Electricity Regulatory Commission, Sam Amadi, has cautioned against hasty moves to amend the Electricity Act 2023, warning that such an action could derail the progress made in building a stable and competitive electricity market.
Amadi spoke as a guest speaker at the 10th anniversary celebration of the Association of Power Generation Companies of Nigeria, held on Monday in Abuja.
The event, themed “A Decade of Powering Progress, Driving Nigeria’s Energy Transformation,” brought together key stakeholders from across the power sector to reflect on achievements and challenges over the past decade, particularly from the perspective of power generation companies.
Amadi, who served as NERC Chairman between 2010 and 2015, said the sector must first allow existing reforms to take root before contemplating any legislative review.
According to him, the tendency of policymakers to rush into amending laws at the slightest sign of difficulty has become one of the key reasons Nigeria’s electricity reforms struggle to yield lasting results.
Amadi said, “First, I think that we should accept that there will be failure and success in the electricity market. We should accept that building this electricity market will be a trial-and-error process. We should not be too inoculate around failure. Once we start an experiment, we try to go back again, back and forth. If there’s trouble, we should think about revision, not destruction and reconstruction.
“The Nigerian electricity sector is tied to politics too much. If there’s a problem, they start looking for solutions, and the solution becomes worse than the problem. Already, the Electricity Act is undergoing a process to be amended. Some of the provisions of the current law have not even been implemented.
“I don’t think there’s any need to amend the Electricity Act at this stage. We are too quick to tear down what we have built before giving it time to mature. Amendments should come from trial, with evidence and reviews. Let us develop the resilience and patience to work through problems rather than constantly changing models, institutions, and laws.”
The former NERC boss, who oversaw part of Nigeria’s power sector reforms during the early years of privatisation, said the country must learn to sustain policies long enough to identify genuine structural weaknesses.
He recalled that during his tenure, he resisted calls to amend the Electric Power Sector Reform Act of 2005, arguing that the sector needed at least 15 years of steady implementation to justify any legislative change.
“When I was chairman, and they wanted to amend the Electricity Act, I said no. We needed time to test the law and understand its practical implications. Now, some of the provisions of the new Electricity Act have not even been implemented, yet people are calling for amendments. What exactly are we amending?”
Amadi, who now teaches policy and energy economics at the University of Abuja and the University of North Dakota’s Emirates School of Energy, said Nigeria’s electricity policy is often too politicised, with stakeholders seeking quick fixes instead of building durable institutions.
Signed into law by President Bola Tinubu in June 2023, the Electricity Act replaced the Electric Power Sector Reform Act of 2005 and introduced sweeping changes, including granting states, companies, and individuals the authority to generate, transmit, and distribute power within their territories.
The law decentralised the electricity market — a major shift from the previous federal monopoly — and paved the way for subnational electricity regulation. However, just a year after its enactment, discussions have begun within government circles about amending the Act to address operational gaps and clarify overlapping regulatory roles between the Federal and State Electricity Regulatory Commissions.
Amadi noted that the decentralisation of the electricity market, allowing states to operate subnational electricity systems, was a bold and commendable step, but warned that the transition must be handled carefully to avoid chaos and regulatory contradictions.
“We must accept that there will be both failure and success. We shouldn’t abandon the subnational electricity markets because of initial problems. What we need is revision and imagination, not destruction and reconstruction.”
The expert raised concerns that multiple state-led markets could emerge with conflicting rules and unsynchronised regulations, creating confusion for investors and generators.
“We could end up with 20 electricity markets in two years, each with its own law and regulations. Without proper harmonisation, generation companies could be stranded with power they cannot sell efficiently,” he warned.
He urged the Federal Government and NERC to “grandfather” the new subnational markets by developing national protocols that guarantee interoperability between federal and state systems.
Amadi also cautioned that Nigeria’s fragile national grid could become further fragmented if states fail to coordinate their market structures.
“I fear that after 10 years, many state electricity markets may fail, forcing us back to the national system. The grid is a national asset designed for equitable access. If states run separate systems without coordination, some regions could be left without reliable power,” he said.
On the sector’s liquidity crisis, Amadi explained that while market operators should ordinarily bear the burden of debts and shortfalls, the current electricity market is too weak to sustain itself without government intervention.
“In a well-functioning market, all variations, whether subsidy, underpayment, or inflation, are restructured for the market to pay. But in a market suffering endemic financial illiquidity, leaving the burden entirely to operators will cripple the system.
“This is perhaps why government intervention becomes necessary. The market should pay, but the market cannot, not in its present state,” he stated.
He further advised policymakers to balance reforms across all value chain segments rather than focusing narrowly on distribution and transmission.
“The government should pay equal attention to generation. Even if we fix the DisCos today, we will still need at least five years to ramp up generation capacity. Generation is the engine of market stability,” Amadi noted.
Speaking on the ongoing unbundling of the Transmission Company of Nigeria into the Transmission Service Provider and the Nigeria Independent System Operator, Amadi said the move could enhance efficiency but only if accompanied by strong governance, coordination, and technology investments.
“Unbundling brings efficiency but also complexity. If coordination between TSP and NISO is weak, we will only worsen inefficiency,” he cautioned. “Let’s not just create NISO and go to sleep. Both institutions must have convergence points where the generators, dispatchers, and network operators communicate clearly.”
Amadi urged the government to prioritise institutional stability and policy coherence over constant reform experiments.
“Every improvement requires intelligence to sustain it. We have made progress, yes, perhaps not enough to be felt in every home, but progress nonetheless. What we need now is stability, not another round of legislative surgery.”
Earlier, the Chairman of the Association of Power Generation Companies’ Board, Col. Sani Bello (retd.), renewed calls for the government to urgently tackle the worsening liquidity crisis in the Nigerian Electricity Supply Industry, warning that debts owed to GenCos may rise to N6tn by the end of the year.
He said the debt level had become unsustainable and was threatening the stability of the power sector and severely constraining GenCos’ operations.
He said, “As we celebrate, it is also important to reflect on the realities that still define our industry. The challenges facing the Nigerian power sector are well known: persistent liquidity shortfalls; inadequate gas supply and infrastructure; market inefficiencies and imbalance in payments; ageing equipment and inadequate investment in grid stability; and regulatory and policy uncertainties that sometimes undermine investor confidence.
“Yet, the difference today is that we face these challenges together. Our commitment, despite regulatory hurdles, gas supply constraints, and liquidity shortfalls, is commendable.”
Bello stressed the need for stronger collaboration among key industry stakeholders, including the Ministry of Power, NERC, NBET, TCN, gas suppliers, and DisCos, to resolve systemic issues.
“We must push for consistent, transparent, and investor-friendly policies that enable innovation and sustain power generation investments. The success of GenCos is Nigeria’s success; no nation can industrialise without reliable electricity,” he added.
In response, the Federal Government assured power producers that their outstanding payments would be made.
The Permanent Secretary, Federal Ministry of Power, Mahmuda Mamman, represented by Evangeline Babalola, Director of Planning, Research and Statistics, acknowledged the GenCos’ resilience in the face of enormous financial strain.
“Your dedication to keeping Nigeria’s lights on despite severe liquidity challenges is a demonstration of patriotism.
“These achievements reflect your technical expertise, financial investment, and commitment to national growth. Despite being owed substantial debts, you have not abandoned your responsibilities, and for that, Nigeria owes you not just gratitude, but actual payment.
“In recognition of the critical importance of resolving this issue for the sustainability of the power sector, Mr President has constituted a committee specifically mandated to address the payment of outstanding debts owed to the GenCos,” Mamman said.
The Chairman of the Senate Committee on Power, Enyinnaya Abaribe, also called for deeper collaboration between government, private investors, and regulatory institutions to tackle persistent challenges in Nigeria’s electricity supply industry.
Abaribe said the path to a reliable and sustainable power supply lies in collective action, policy consistency, and sustained investment across the electricity value chain.
He commended the APGC for its decade-long advocacy and partnership in shaping Nigeria’s energy reform agenda, describing the association as a “unified and authoritative voice” for the nation’s generation companies.
The senator noted that despite the sector’s progress since privatisation, issues such as tariff imbalance, gas supply constraints, and financial sustainability still threaten the stability of the market.
He urged government agencies, regulators, investors, and development partners to maintain constructive engagement with APGC in driving reforms that would ensure affordable and stable electricity for Nigerians.
“The challenges ahead require coordinated action, and I am confident that through platforms such as this association, we can achieve the reliable and sustainable electricity supply our nation deserves,” he added.
