Lagos: An energy economist, Wumi Iledare, says Nigeria’s electricity crisis will persist without economic and institutional reforms, rather than continued dependence on technical solutions.
Iledare, Professor Emeritus at Louisiana State University, spoke with the News Agency of Nigeria on Saturday in Lagos.
He said Nigeria’s electricity problems had been repeatedly misdiagnosed, with excessive focus on engineering solutions instead of the economic realities shaping power systems.
“Technology delivers electrons; economics determines whether those electrons are affordable, available, reliable, and sustainable,” he said.
He argued that tariff increases, often presented as solutions, only expose deeper structural weaknesses within the electricity market.
According to him, cost recovery, market design, fuel security, transmission constraints, governance failures, and inconsistent policies require coordinated and comprehensive reforms.
Iledare described current pricing models, including band-based tariffs, as inadequate and conceptually flawed.
“The affordability–availability–sustainability trilemma cannot be solved through tariff adjustments alone,” he said.
He warned that superficial pricing reforms could worsen distortions already affecting the sector.
Iledare also criticised Nigeria’s restructuring strategy, saying decentralisation had been treated as an objective, not a pathway to efficiency.
He noted that decentralisation might encourage competition, but does not automatically attract investment, improve operations, or expand electricity access.
“Without coherent industrial policy and market clarity, fragmentation may simply replicate inefficiencies,” he cautioned.
On consumer classification, he said policymakers had overlooked differences between residential, commercial, and industrial electricity users.
He explained that each consumer category had distinct demand patterns, economic functions, and reliability expectations requiring tailored pricing frameworks.
“Industrial consumers are not just electricity buyers; they drive productivity and employment,” he said.
He added that weak pricing philosophies distort incentives and undermine industrialisation.
Iledare said Nigeria’s move away from vertically integrated power systems might have come too early.
He said the transition occurred before institutions, regulators, and infrastructure were strong enough for competitive electricity markets.
“Sequencing matters. Liberalisation without readiness often creates liquidity crises and weak coordination,” he said.
He called for a broad sectoral reset anchored on electricity economics and development-focused public policy.
According to him, Nigeria must define the power system needed for industrialisation, energy security, and inclusive economic growth.
“Electricity reform must prioritise productivity, competitiveness, and economic transformation,” he said.
