National Economic Implications of the Gradual Migration of Citizens from the National Grid: A Call for Legislative Intervention

Abstract

Nigeria's power sector still faces problems of inadequate generation, poor infrastructure, and power grid collapses, leading to power shortages. While the installed power generation capacity stands at more than 13,000 megawatts, actual power generation averages between 4,000 and 5,500 megawatts to serve a population of over 200 million Nigerians. This has forced Nigerians to increasingly turn to self-generation of power through the use of diesel, petrol, solar power, and mini-grids. This trend of turning away from the national grid has many implications, including higher production costs, reduced sectoral revenue, inequality of power supply, and increased greenhouse emissions. Estimates show that the lack of a consistent power supply costs Nigeria billions of dollars every year, while the use of generators raises costs and public health concerns. Though recent initiatives by the government, including the Grid Asset Management Company Limited and the Presidential Metering Initiative, are aimed at addressing the problems of power supply in Nigeria, underlying problems still exist, including issues of transmission, regulatory consistency, liquidity, and institutional coordination, all of which are forcing Nigerians to increasingly turn to self-generation of power, thereby leading to the underutilization of existing power generation infrastructure in the country. This brief highlights the need for legislative intervention to strengthen grid performance, improve affordability, and regulate the expanding off-grid market. It recommends that: i. The National Assembly may invite the Minister of Power to explain the frequent failures of the national grid and outline measures, including ongoing initiatives such as the Presidential Power Initiative, aimed at strengthening generation, transmission, and distribution infrastructure to improve electricity reliability. Some of these measures should include the introduction of a dedicated public platform that displays real-time progress data, including data from meters deployed by the state, Disco, installers, and vendors. ii. The National Assembly may advise the Federal government (Ministry of Power, the Nigerian Electricity Regulatory Commission [NERC] and the Rural Electrification Agency [REA]) to introduce a means-tested electricity subsidy for low-income households, identified through the national social register, with implementation beginning in the next fiscal year. iii. The National Assembly may advise the Federal Ministry of Power to regulate and partner with off-grid energy providers to deliver reliable, affordable electricity, while ensuring that these services do not replace but supplement the national grid and remain accessible to low-income households.