Power sector reforms and the trust deficit in Nigeria’s electricity market

There is a scene that plays out in Nigerian homes with familiar regularity. The lights go out. The generator starts. Life adjusts. What that routine does not show is this: Nigeria has an installed electricity generation capacity of 15,500 megawatts (MW), yet on most days in early 2026, the national grid has delivered fewer than 3,000 MW. That gap is the story.

Traditionally, that gap is often described in technical or financial terms. It is framed as a liquidity crisis, a transmission constraint, or a gas supply challenge. Each of those explanations is valid. Taken together, they point to a deeper issue that receives less attention.

Nigeria’s power sector is not only managing a supply gap. It is also managing a growing credibility gap. As a communications professional with an interest in public policy, I do not approach this from an engineering standpoint. What draws my attention is how the sector explains itself, how policy is communicated, and how the loop between what is promised and what is delivered shapes public trust over time.

The numbers are worth examining closely. Data from the Nigerian Electricity Regulatory Commission shows that in 2025, generation companies issued invoices totalling about N3.16 trillion, while payments amounted to roughly N1.24 trillion, a settlement rate of just over 39 per cent. Of the N1.92 trillion shortfalls, the overwhelming majority was linked to unpaid subsidy obligations. In practical terms, only a small fraction of what was owed was settled within the year.

In response, the Federal Government introduced a N501 billion bond in early 2026 through the Nigerian Bulk Electricity Trading Plc, as part of a broader debt reduction programme. The scale of that intervention and the level of investor participation signal intent and confidence in the reform direction. At the same time, the bond represents a portion of total outstanding obligations, and the timing of disbursement has not yet aligned with public expectations.

This is where communication becomes consequential. When major interventions are announced with the language of resolution, but outcomes are not yet visible, expectations begin to move ahead of delivery. Over time, that pattern creates a credibility gap. Each new announcement is then received not on its own terms, but through the lens of previous expectations that were not fully met.

A similar pattern can be observed across operational dynamics; the ongoing exchanges between generation and distribution companies. Generation companies point to unpaid invoices and unused capacity. Distribution companies point to infrastructure limitations and commercial losses. The Transmission Company of Nigeria references operational constraints and allocation frameworks. Each position reflects a part of the system.

However, from a public perspective, the recurrence of these explanations over many years sends a different message. It suggests a system where issues are consistently described, but less frequently resolved in ways that are clearly visible. In the absence of a widely understood resolution pathway, repeated explanations begin to sound like a loop.

Within communications practice, repetition without visible change affects credibility. Over time, audiences disengage from the message, regardless of its accuracy. In a sector as central to economic activity as electricity, that disengagement has real implications for how reforms are perceived and supported.

Importantly, this is not a question of assigning responsibility to any single institution. The Ministry of Power, the Nigerian Electricity Regulatory Commission, the Transmission Company of Nigeria, and sector operators all have defined roles within a complex system. What matters from a communications standpoint is whether those roles, and the sequence of actions they produce, are being expressed in a way that allows the public to follow the logic of reform.

To be fair, there are meaningful developments worth noting. The National Integrated Electricity Policy provides a framework for long-term restructuring. The Electricity Act of 2023 creates space for decentralised and state-level electricity markets. The recent bond programme attracted strong investor participation.

Plans around transmission restructuring, including the proposed Grid Asset Management Company, indicate ongoing institutional efforts to strengthen the system. At the same time, policy actions such as gas price adjustments and ongoing subsidy obligations interact in ways that are not always clearly explained in public communication. For businesses and households navigating persistent supply challenges, these developments can appear as separate decisions rather than parts of a connected reform process.

Consequently, a broader communication challenge emerges. The sector often communicates events. Tariff adjustments, financing interventions, and policy announcements are shared as standalone updates. What is less consistent is communication of the system itself, how these elements connect, what changes they are expected to produce, and when those changes should become visible.

Addressing that gap does not require oversimplification. It calls for sequencing, clarity, and consistency. Announcements should be tied to measurable milestones. Timelines should be trackable. Explanations should connect policy decisions to expected outcomes. A more visible role for the regulator in publicly clarifying disputes and outlining resolution paths would also strengthen coherence.

 

.Egbomeade is a communications and media professional with interests in public policy and governance.