Regulatory uncertainty and overlapping mandates between federal and state authorities are now the primary risks facing Nigeria’s electricity market, according to a new report following PwC’s Annual Power and Utilities Roundtable.
The 2026 Power and Utilities report highlights that the transition following the Electricity Act 2023 is entering a “decisive phase” where dual regulation is stalling critical infrastructure investment.
PwC analysts noted that while capital is available, institutional investors remain in a “wait-and-see” mode due to inconsistent transition arrangements as states begin activating their own regulatory commissions.
A major friction point is the jurisdiction tug-of-war between the Nigerian Electricity Regulatory Commission and new state bodies over technical standards and grid-reliant licenses.
The firm warns that this “patchwork” of pricing models and subsidy regimes across state lines creates operational inefficiencies for DisCos, further weakening the sector’s already fragile liquidity.
This regulatory bottleneck threatens to keep alternative energy costs high, potentially undermining recent macroeconomic gains and the Central Bank’s ongoing efforts to stabilize national inflation rates. Recent data shows that while over 15 states have initiated independent market frameworks, the lack of a unified transition roadmap has led to licensing duplication for major operators.
This fragmentation coincides with the National Bureau of Statistics reporting persistent energy-driven pressure on the Producer Price Index, despite a gradual decline in headline inflation to 15.06% in February
The report concludes that stabilizing these reforms is essential to ensuring that the power sector does not remain a structural drag on Nigeria’s broader economic recovery and industrial growth.
