In its report titled “Priority actions for the successful evolution of Nigeria’s multi-tier electricity market,” PwC warned that overlapping mandates and unclear transition frameworks could undermine investor confidence, disrupt operations, and slow the pace of ongoing reforms in the power sector.
The report comes at a critical phase in Nigeria’s electricity market restructuring, as recent policy shifts expand the role of state governments and sub-national regulators in managing intra-state electricity activities. While the decentralisation drive is intended to improve efficiency and attract investment, PwC cautioned that poor alignment between tiers of government could create systemic uncertainty.
According to the firm, regulatory overlap remains one of the most significant risks confronting the reform process. It noted that as states assume greater control over electricity markets within their jurisdictions, friction with existing federal institutions is inevitable unless clear boundaries and transition rules are established.
PwC stressed that inconsistent or unclear arrangements could heighten uncertainty for utilities, investors, and consumers alike, potentially weakening the foundation of the evolving market structure. The firm emphasised that clarity in governance frameworks and coordination mechanisms is essential to ensure a stable and predictable operating environment.
Beyond regulatory concerns, the report highlighted persistent structural weaknesses in the electricity distribution segment, which continue to constrain sector performance despite ongoing reforms. These include chronic liquidity challenges, unresolved legacy debts, inadequate metering, and ageing infrastructure.
PwC noted that liquidity pressures across the value chain remain a major impediment, with distribution companies particularly affected.
The firm explained that unreliable consumption data has contributed to billing inefficiencies, frequent disputes, and weak revenue collection, further compounding financial stress within the sector.
It added that without credible and accurate data systems, regulatory decisions become more difficult to implement and sustain, thereby weakening overall market underscored that decentralisation alone would not resolve long-standing inefficiencies in the power sector.
Instead, it called for coordinated interventions to address foundational issues, particularly in distribution networks, where infrastructure deficits continue to limit service reliability and operational efficiency.
PwC further observed that investment outcomes in the electricity market would depend significantly on governance quality, regulatory certainty, and the structure of projects being implemented under the new framework.
While acknowledging ongoing reform efforts, the firm maintained that addressing underlying financial and operational weaknesses must remain a priority to achieve meaningful and sustainable improvements in power supply.
It concluded that establishing clear regulatory boundaries, strengthening data systems, and ensuring effective collaboration between federal and state authorities would be critical to stabilising Nigeria’s electricity market transition and unlocking long-term sector growth.
