NERC Chairman Highlights 'Market Problem' as Key Challenge in Nigeria's Electricity Sector
The Chairman of the Nigerian Electricity Regulatory Commission (NERC), Musiliu Oseni, has issued a stark warning that Nigeria's persistent electricity challenges extend far beyond mere deficits in generation, transmission, or distribution. Speaking at the inauguration of the Forum of Nigerian Electricity Regulators (FoNER), Oseni emphasized that the sector's difficulties stem from a deeper, structural "market problem" that requires urgent and coordinated intervention.
Beyond Reductionist Views: The Core Issue of Market Sustainability
Oseni cautioned against what he termed a reductionist perspective that narrowly attributes the industry's woes to isolated segments of the value chain. He insisted that such views are misleading and obscure the fundamental issue: the inability of the electricity market to operate sustainably. "The challenge facing our industry is often reduced to a specific segment of the value chain: generation, transmission or distribution problem. However, this reductionism is misleading; the key issue is that we have an electricity market problem," he stated.
He elaborated that the critical question is not merely the volume of electricity generated, but how effectively the market can function to deliver reliable power and ensure long-term viability. "The main question is not how much power can we generate. Rather, the key question is: how can our market operate sustainably?" Oseni queried, highlighting the need for a holistic approach to sector reforms.
Call for Coordinated Regulatory Action
In his address, Oseni urged regulators to adopt a more collaborative and coordinated strategy to prevent regulatory arbitrage by market participants and ensure that reforms translate into tangible economic value. "We must work collaboratively to avoid regulatory arbitrage by the operators. I charge all of us to carry out this mandate with the highest sense of responsibility," he asserted.
He positioned the newly established FoNER as a central platform designed to deepen coordination across federal and state regulators, addressing what he described as a fundamental "electricity market problem" in Nigeria. Oseni noted that the forum's creation marks a deliberate effort to align regulatory frameworks, strengthen consumer protection mechanisms, and unlock much-needed investment in the country's power sector.
Context of Ongoing Sector Struggles
The establishment of FoNER comes at a critical juncture, as Nigeria's electricity sector continues to grapple with multifaceted challenges, including liquidity constraints, infrastructure deficits, and regulatory fragmentation across different jurisdictions. Oseni underscored the vital role of electricity in national development, stating, "Electricity is the oxygen for economic growth and prosperity. Unfortunately, our industry is fraught with varying challenges that require effective coordination and synergy among the captains of the industry."
This initiative aims to foster a unified regulatory environment, potentially paving the way for more stable and sustainable power supply in the face of longstanding operational and financial hurdles.
