Power to the States: Tinubu Signs Landmark Electricity Amendment Act to End Federal Monopoly

ABUJA, Nigeria — In a decisive move to overhaul Nigeria’s struggling energy sector, President Bola Ahmed Tinubu has signed the Electricity Act (Amendment) Bill into law. This landmark legislation officially de-monopolizes the power sector, stripping the Federal Government of its exclusive control and handing over the reins of generation, distribution, and regulation to State Governments.

Breaking the 19-Year Jinx

The new law effectively amends the outdated framework of the 2005 Electric Power Sector Reform Act. By removing electricity from the Exclusive Legislative List and moving it to the Concurrent List, the Nigerian Constitution now empowers the 36 states to:

• Issue Licenses: States can now grant licenses to private investors for independent power plants and mini-grids.
• Regulate Local Markets: State-run regulatory commissions will replace the federal NERC in managing internal electricity markets.
• Distribute Power: Local governments can now manage their own distribution networks, bypassing the bureaucratic bottlenecks of the national grid.

No More Excuses: Governors in the Hot Seat

The most significant shift brought by this Act is the transfer of accountability. For decades, State Governors blamed “Federal failure” for the darkness in their domains. Under this new legal regime, that excuse has expired.

“With great power comes total accountability. State Governors will now be held directly responsible by their constituents for the success or failure of electricity supply within their borders.”

Industry experts note that this decentralization will trigger a “race to the top,” where states with the most investor-friendly electricity laws will attract the lion’s share of industrial growth and job creation.

Host Communities Get a Stake

Beyond state autonomy, the 2024 amendment introduces a mandatory 5% development fund. Power Generating Companies (GenCos) are now legally required to set aside 5% of their actual annual operating expenditure for the infrastructure development of their host communities, ensuring that those living near the plants benefit directly from the energy produced.

With this signing, the Tinubu administration has laid the foundation for Energy Federalism, shifting the burden of “lighting up Nigeria” from a single office in Abuja to the doorsteps of the 36 State Houses.