The Nigerian Electricity Regulatory Commission (NERC) has urged the Federal Government to re-evaluate how the $2 billion under the Rural Electrification Agency (REA) is being used, recommending that part of the fund be redirected to strengthen electricity supply in the country’s industrial zones.
Speaking at NERC’s 20th anniversary celebration in Abuja, Vice Chairman Musiliu Oseni said the government’s current focus on rural mini-grids, while commendable, does little to drive industrial growth or lift the broader economy. He argued that sustainable development depends on powering industries that can generate employment, reduce production costs, and ultimately make goods more affordable for Nigerians.
“The government needs a deliberate policy to power our industries if we want real economic prosperity,” Oseni said. “You can increase access through mini-grids, but you can’t power the economy to prosperity with them alone.”
Powering Industry, Powering Growth
Nigeria’s persistent power challenges have long burdened manufacturers, who often depend on expensive diesel generators to stay in operation. The result is higher production costs that spill over into the prices of everyday goods, from food to building materials, putting more pressure on already stretched household incomes.
Redirecting a portion of the REA’s $2 billion fund to stabilise electricity for industrial clusters, Oseni said, could help ease these costs by improving energy reliability for factories and small businesses. That, in turn, could boost productivity and attract fresh investments into the manufacturing sector.
Oseni also highlighted the need for a stronger regulatory framework to attract private capital into power infrastructure, as the government’s limited fiscal space makes it unlikely to fund large-scale projects alone.
Two Decades of Power Reform
Reflecting on NERC’s two-decade journey since its establishment in 2005, Oseni noted that the Commission had overseen the unbundling and privatisation of Nigeria’s electricity monopoly, introducing regulations that improved market transparency and consumer protection.
He said around 30 percent of electricity consumers now enjoy better service compared to 20 years ago, and that effective regulation has saved the government trillions of naira in subsidies. Still, he admitted that the transmission network remains weak and underfunded, limiting the progress made so far.
Established under former President Olusegun Obasanjo’s reform agenda, NERC was tasked with creating a competitive electricity market, setting tariffs, and ensuring transparency. Two decades later, the agency continues to face the challenge of balancing investment, affordability, and access, a balance that has direct consequences on Nigeria’s cost of living.
For ordinary Nigerians, the outcome of this policy debate is far from abstract. Reliable power for factories means cheaper goods, stable jobs, and a more predictable economy, something millions are still waiting to see.
