Nigeria's Electricity Markets Need Unified Rules to Attract Investors

The Federal Competition and Consumer Protection Commission (FCCPC) has warned that Nigeria’s new state electricity markets might struggle to get investors if states keep making different rules. They emphasized that cooperation among electricity regulators is crucial to protect consumers and give investors confidence.

Tunji Bello, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, gave this warning on Thursday at a meeting with stakeholders about consumer protection and regulatory cooperation in Nigeria’s electricity sector in Abuja.

The meeting included officials from the Nigerian Electricity Regulatory Commission (NERC), the Nigerian Electricity Management Services Agency (NEMSA), and several state electricity regulatory commissions. This comes after the Electricity Act 2023 allowed states to set up and manage their own electricity markets.

The Electricity Act, signed in 2023, ended years of federal control over Nigeria’s electricity sector. It lets states create their own regulatory frameworks if they meet the required standards. Since then, states like Lagos, Enugu, Plateau, and Anambra have started their own electricity regulatory bodies to boost electricity supply and attract private investment.

But many stakeholders have raised concerns that different regulations in each state could make investors hesitant. This could lead to higher costs for companies and uneven consumer protection.

Building Consumer Trust

Bello said the Electricity Act is one of the biggest changes in Nigeria’s electricity sector. He believes its success will depend on how well federal and state regulators work together.

“The Electricity Act of 2023 represents one of the most significant reforms of Nigeria’s electricity sector in recent years,” he noted.

“Beyond creating new opportunities for investment and improved service delivery, it has fundamentally reshaped our regulatory architecture,” he added.

He pointed out that while states now have the freedom to regulate based on their needs, consumers should have the same protection no matter where they live.

He stressed that electricity users care more about reliable service and fair treatment than which agency handles their problems.

“Consumers experience electricity as one system. When supply is interrupted or a bill seems wrong, they are not concerned about which regulator has jurisdiction. They simply expect protection and that our institutions work together in our responsibility and not theirs.”

Bello explained that while NERC oversees the electricity industry, NEMSA ensures technical standards are met. State commissions manage local electricity markets, while the FCCPC looks after consumer protection and competition.

He believes these roles should work together instead of competing.

“Our objective is to consult, exchange information, support one another’s lawful actions, and ensure consumers receive timely and effective protection,” he said.

Bello gave an example of how regulators worked well together by suspending the planned replacement of outdated Unistar prepaid meters in 2024. After concerns were raised, the FCCPC brought NERC, NEMSA, and electricity distribution companies together for discussions.

The replacement plan was put on hold until regulatory requirements were met. NERC later issued an order that provided a clear way to replace faulty meters.

“This order ensured that consumers would not pay for replacing old meters, wouldn’t face power cuts during the replacement, and wouldn’t get estimated bills because of delays,” he explained.

He added, “Those safeguards reflected the principle that consumers should never be disadvantaged when infrastructure is outdated through no fault of their own.”

Bello also mentioned that effective regulation should not just be about how many complaints are resolved but also how many disputes are avoided.

“Strong regulation is not built on institutional rivalry. It is built on cooperation, mutual respect, and a shared commitment to the public interest,” he said.

Investors Need Clarity

Anthony Essien, NERC’s Assistant Director and Head of Consumer Protection Department, also spoke. He said having uniform regulations will become more important as more states create independent electricity markets.

He warned that different rules across states could make it hard for investors and discourage them from investing.

“It would not be easy, especially looking at investors coming in and having different standards across 36 states. But if we come together and create a unified effort to bring forward laws, it would strengthen our mandates across the different states.”

Essien said the FCCPC now plays a key role in NERC’s process for handling consumer complaints. They also take part in the Consumer Complaints Forum.

Chijioke Okonkwo, Chairman of the Enugu State Electricity Regulatory Commission, said the engagement was timely. He believes working with federal regulators will help state commissions improve consumer protection.

Frank Nwoye Okafor, Chairman of the Anambra State Electricity Regulatory Commission, warned that different regulations could block investment.

“The biggest nightmare for an investor is trying to figure out 36 different rules. But if we have this sort of coordination, then we start singing from the same hymn sheet,” Okafor said.

The Electricity Act 2023 is seen as Nigeria’s most significant electricity reform since the power sector was privatised in 2013. It allows states to manage their electricity markets, aiming to increase access, attract private investment, and improve services.

But as more states create their independent electricity markets, regulators and industry players agree that having a unified set of regulations will be vital. This will help keep investor confidence, avoid regulatory confusion, and ensure consumers get equal protection no matter where they live.