Nigeria’s ongoing electricity sector reforms hinge on clearer regulatory frameworks and stronger coordination between federal and state authorities, according to a new report by PricewaterhouseCoopers (PwC). The report, titled “Priority actions for the successful evolution of Nigeria’s multi-tier electricity market,” comes as Nigeria transitions toward a decentralised electricity system with expanded roles for state governments and sub-national regulators.

PwC’s analysis highlights growing policy and operational tensions as reforms deepen, particularly concerning jurisdiction, investment certainty, and market coordination. The firm argues that regulatory uncertainty and overlapping mandates between federal and state authorities remain one of the biggest risks to Nigeria’s electricity reforms.

Without clear rules, the transition to a decentralised electricity market could create confusion for operators and investors. PwC stated, “Regulatory clarity and federal and state alignment… As states exercise authority over intra-state electricity activities, overlap with federal institutions is unavoidable.”

The report added, “Where transition arrangements are unclear or inconsistent, uncertainty rises for utilities, investors and consumers. Clear boundaries and agreed transition rules provide the foundation on which all other elements of reform depend.”

PwC also noted that data shared by utilities and reinforced by the Honourable Minister highlighted persistent liquidity stress, legacy debt, metering gaps and ageing infrastructure. “Where consumption data is unreliable, billing disputes persist, collections weaken and regulatory decisions become harder to sustain,” the report said.

The firm concluded that clarity in governance, data systems, and transition rules is essential for stabilising the reform process. Beyond regulatory overlap, PwC points to structural weaknesses in Nigeria’s electricity distribution system as a major bottleneck to reform success. These issues continue to affect liquidity, efficiency, and investor confidence despite ongoing policy changes.

The report also highlights that decentralisation alone will not resolve long-standing inefficiencies in the power sector.