Two documents recently entered social media and the news cycle. During six days in October, the Coordinating Minister of the Economy/Minister of Finance (CME) reported on the state of the economy to the two most important councils of the Federation: fifteen slides to the National Economic Council (NEC) on 22nd October, and nine to the Federal Executive Council (FEC) on 28th October.

Both decks promise to secure stability, accelerate growth, improve living standards and carry the country “from stabilisation to shared prosperity”. The FEC version makes “energy price stability” part of its first priority and asks Council to reject “unfunded commitments”. The NEC version calls for “electricity reliability” for manufacturers and asks the States to advance “productive-use connections” to the grid.

Two State of the Economy papers promised growth, stability and shared prosperity. Neither counted the electricity on which all three depend.

These are worthy aims. What struck my electricity eye was what the decks left out. There is no “megawatt” and no “megawatt-hour”; no tariff and no loss ratio; no mention of the trillions of Naira the Federal Government owes the generation companies (Gencos). NERC, the Gencos, the distribution companies (Discos), TCN and the State electricity markets are all absent. Twenty-four slides on the economy, and the sector on which its objectives rest appears only as a vague aspiration.

Unlike many things Nigerian, this omission is not for want of data: the Nigerian Electricity Regulatory Commission (NERC) publishes numbers every quarter and sub-sectoral reports appear monthly. So, let us test both decks against NERC’s numbers.

Energy Price Stability

End-user tariffs have been frozen at July 2024 rates. Each month NERC issues supplementary Orders updating the cost of supply for inflation, the exchange rate and the price of gas, and every month the gap between that cost and the frozen tariff is handed to the Federal Government (FGN). This is stability by fiat, born of the abiding belief of governments and regulators that they hold sway over the laws of economics and physics. In the second quarter the Gencos invoiced =N=647.72bn. The Discos were billed =N=326.46bn, all their tariffs can bear, and the FGN’s share was =N=321.26bn: about =N=3.5bn a day, =N=679.58bn for the half year, and about =N=1.32tn for 2026 if the rest of the year matches.
To be fair, the subsidy has fallen for two quarters running, from =N=418.79bn at the end of 2025. But the arithmetic of “stability” is stark. The FGN pays almost half the generation bill. If that share goes next year, as the Minister of Power says it will, and losses are not cut, the Discos will have to collect roughly half as much again as they do now. Did the CME discuss this with the Minister of Power, or point it out to NEC? Do the Discos know what is coming? Does each State know what share of the subsidy it may soon carry?

That prospect collides head-on with the FEC deck’s promise of single-digit inflation in 2027. The burden would also fall unevenly: the FGN pays 83% of generation cost in Yola, 61% in Kano, 58% in Kaduna and 53% in Jos. The most subsidy-dependent franchises are in the North, where losses and insecurity are highest. To pursue price stability nationally, in markets passing from federal to State regulation, without saying how it will be delivered in each of them, is a slogan, not a policy.

No Unfunded Commitments

The electricity tariff subsidy is a commitment; whether it is funded is another matter. In the first four months of this year the Gencos invoiced an average of =N=213.5bn a month and were paid about =N=90.8bn, or 43%. The FGN paid about 4% of the =N=1.928tn it owed for 2025, made no provision for the subsidy in its 2026 budget proposal, and now proposes to share the bill with the States through the Federation Account. The Gencos put their receivables at about =N=7.66tn.

The President has approved a bond programme, reportedly about =N=3.3tn, to settle verified arrears, but the first tranche of =N=501bn covers barely 7% of the legacy debt. Between 40% and 50% of these bills are owed in turn to gas suppliers, which is why both sub-sectors have barely grown their domestic supply in a decade. Meanwhile the Power Consumer Assistance Fund, which the Electricity Act 2023 provides to support poor consumers, sits unutilised.

The largest unfunded commitment in the economy is therefore the one the FEC deck does not mention. Electricity price stability is borrowed, by fiat, from the balance sheets of Gencos and gas suppliers who are not being paid. There will have to be a reckoning.

Growth and Reliable Supply

Both decks want broader growth and reliable electricity for manufacturers. Yet the wholesale market is stagnant. Average available capacity in the second quarter was 4,454.17MW, unchanged from the first and just 32.69% of the 13,625MW installed. Generation fell 1.11% to 8,784.93GWh. The Discos took an average of 3,197 megawatt-hours per hour from the grid: across roughly 230 million Nigerians, about 14 watts each, or one 40-watt bulb for every three citizens. That is an embarrassment. Not reliability or growth.

There was no system collapse in the quarter, against two in January, and that deserves credit. But frequency and voltage strayed outside Grid Code limits on many days, and transmission losses of 8.44% exceeded the 7% the tariff allows.

Electricity of that quality damages equipment. The Discos also took only 94% of the capacity contracted to them while paying for all of it.

The economy took notice. Industry grew 3.96% in the second quarter, against 7.46% a year earlier, and the electricity sector contracted by 10.63%. Manufacturers spent =N=1.34tn on self-generation in 2025, 9x the 2022 figure, as their grid supply fell from 16.7 to 13.1 hours a day. Their capacity utilisation, on the latest published figure, was 61.3%. With diesel at =N=1,780 to =N=1,800 a litre, self-generated electricity costs about =N=500 a kilowatt-hour in fuel alone, nearly two and a half times the Band A tariff. A growth strategy that ignores this ignores the real cost of production.

Shared Prosperity

In the second quarter the Discos received electricity worth =N=946.57bn, billed =N=744.67bn and collected =N=603.64bn. Energy worth =N=201.90bn was never billed, and bills worth =N=141.03bn were never paid: =N=342.93bn lost in a quarter, more than the FGN’s entire subsidy. All eleven Discos missed their loss targets; the aggregate loss was 36.23% against the 16.92% allowed. Had the Discos been held to the target, as they could have been, they would have collected about =N=183bn more in the quarter, more than half the subsidy.

The losses are not evenly shared. Eko lost 21%; Kaduna lost 67.70%. Kaduna, Jos and Kano paid less than 70% of their market invoices, and Kano’s collections fell from 62.76% to 47.74% in a single quarter. Some 4.85m customers remain unmetered; the national metering programme has installed about 15% of its 3.2m target and must go 1.7 times faster to finish by 2028. Metering accounted for 59% of the 92,407 complaints to the Discos, and twenty people died in electricity accidents in the quarter. Whatever prosperity is being shared, it is not electricity. Electricity is rationed.

The Productive Customer

On NERC’s data, licensed captive generation exceeds 6,500MW: about 5,180MW under 249 permits, plus the Dangote complex’s 1,500MW. That is more than twice the Discos’ average hourly draw from the grid in the second quarter, an indictment like no other, and the haemorrhage continues. Three more captive permits, for 14.12MW, were issued in the second quarter, the largest for a 12MW cement plant in Sokoto, after 40.82MW in the first, including 6MW for the new Nigeria Revenue Service headquarters in Abuja. Even the tax collector has made other arrangements. Beneath these large users sit an estimated 40,000MW of small generators: overcapacity that is the very definition of unproductive and inefficient. Perhaps 12,000 to 15,000MW of grid capacity would serve the same demand more efficiently and more cleanly.

This writer describes it as the Federal Republic of Self-Help: the last-customer spiral at work. Each industrial customer that leaves takes its creditworthy load with it, narrowing the revenue base and raising losses and tariffs for those who remain, which drives out the next. The productive customer is the market’s anchor; when it goes, the market risks collapse.

NERC has opened one door. The Net Billing Regulations 2026 let customers with rooftop and other behind-the-meter renewables export surplus electricity for credit. That is welcome, but it is misdirected focus. First, bring 6,500MW of captive plant back to the grid. They will come home on four conditions: settlement discipline, because no seller enters a market that does not pay promptly and predictably; conversion, enabling captive plants to become embedded or independent, selling to their neighbours; firm bilateral contracts for bulk customers, with transmission that works; and State markets designed around the productive customer. Not by exhortation and regulatory decree.

The States Are Absent… Again

Under the Electricity Act 2023, the States may establish and regulate their own electricity markets; by the end of June, NERC had handed oversight to sixteen of them, and more are in train. Yet the wholesale market and the subsidy remain national, so each State’s retail market depends on how its Disco pays for electricity from the grid. NERC’s complaint data now exclude the transferred States, so the national picture is blurring just when it matters most. A State weighing a stake in a Disco or its State successor is buying into a franchise where, in five of the eleven cases, the FGN pays more than half the generation cost, a bill the State will soon share through the Federation Account if the federal plan prevails. And no State knows with certainty how many electricity customers within its borders are identified and paying.

NEC is the one forum in which the FGN and all thirty-six Governors sit together. Yet the CME’s only electricity line addressed to the States reads: “advance viable state electricity initiatives and productive-use connections”. Devolving electricity regulation without comprehensive data, clear ownership and coordination is not federalism but abdication by instalment.

What the Next Decks Should Count

All that said, the CME was right to give NEC and FEC a picture of the economy, and should continue doing so, fully and truthfully. Since electricity is the foundation of any meaningful progress and the attainment of our aspiration as a country to be taken seriously by its peers, every such paper should carry at least six electricity numbers: megawatts available, megawatt-hours delivered, distribution losses against target, the market settlement rate and arrears, the subsidy per day, and captive megawatts returned to the grid. And “energy price stability” should become what it professes to be: a funded tariff path, a plan for the arrears, and a programme, set out at and accepted by NEC and cascaded in detail by each State, to bring the productive customer home.

A State of the Economy report that does not account for electricity has not properly reported the economy. The CME says stability is the foundation. If so, that foundation runs on electricity, and Nigeria’s electricity still runs on very expensive diesel.

Eyo O. Ekpo is Chief Executive Officer of Excredite Consulting Limited, Abuja, and a former Commissioner for Market Competition and Rates at the Nigerian Electricity Regulatory Commission.