Nearly three years after the enactment of the Electricity Act 2023, more than half of Nigeria’s states are yet to assume control of their electricity markets, raising concerns about the pace and effectiveness of ongoing power sector reforms.
According to the Nigerian Electricity Regulatory Commission, only 15 states have completed the transition to independent electricity regulation.
These states including Lagos, Ogun, Oyo, Enugu, and Bayelsa have established regulatory frameworks that allow them to manage local electricity markets, attract investment, and oversee tariffs and consumer protection.
However, 21 states including Rivers, Kano, Kaduna, and Sokoto are yet to complete the process. This delay means they remain dependent on federal oversight for electricity regulation, despite provisions in the Act empowering subnational governments to take charge of generation, transmission, and distribution within their jurisdictions.
The decentralisation framework allows states that complete the transition to assume responsibility for licensing intrastate electricity operations, enforcing technical standards, and setting tariffs tailored to local conditions. Meanwhile, NERC retains oversight of interstate electricity activities and the national grid.
The transition began gradually, with Enugu and Ekiti among the first states to assume regulatory authority in October 2024. Momentum increased in 2025 as more states joined, with recent additions such as Nasarawa, Anambra, and Bayelsa completing the process between January and February 2026.
Despite this progress, observers note that some of the states that have transitioned are yet to fully operationalise their regulatory commissions, potentially limiting the expected benefits of the reform.
Industry analysts warn that states lagging behind risk missing out on opportunities tied to decentralisation, including investments in mini-grids, renewable energy, and off-grid electrification projects particularly in rural and underserved communities.
They also argue that state-level regulation could help address longstanding inefficiencies in power distribution by enabling flexible tariff systems, targeted subsidies, and more effective enforcement mechanisms.
The Federal Government has continued to push for broader participation. Speaking at an energy summit in Lagos, the Minister of Power, Adebayo Adelabu, stressed that centralised control is no longer viable for a country of Nigeria’s size and complexity.
He said, “In a country as big as Nigeria, with almost a million square kilometres of landmass, over 200 million people… centralisation cannot work for us. The responsibility of providing stable electricity can never be left in the hands of the Federal Government.
“At the centre, you cannot, from Abuja, guarantee stable power across the country. So, this is one thing that the Act has achieved decentralisation.”
Adelabu urged the remaining states to establish their electricity markets, noting that collaboration between state governments and federal regulators is essential for aligning wholesale and retail power systems.
He added, “I believe other states will follow suit in operationalising the autonomy granted… We are working actively with these states to ensure strong alignment between the wholesale market and the retail market.”
