Aug 20, 2026 (Leadership/All Africa Global Media via COMTEX) --
The decision by the Nigerian Electricity Regulatory Commission (NERC) to dissolve the board of Kaduna Electricity Distribution Plc (Kaduna Electric) did not come as a surprise to many experts in the power sector.
It was a regulatory intervention to save a troubled company. However, it also points to the deeper weaknesses in Nigeria's electricity distribution system. The action provides a fresh opportunity to interrogate whether the country's power privatisation model is delivering the reliable electricity that Nigerians were promised.
NERC's intervention followed what it described as serious financial and operational challenges at Kaduna Electric. Recall that NERC had, in January 2024, dissolved the board of directors of Kaduna Electric over its inability to pay about N110 billion owed to the Nigerian Electricity Supply Industry. As of May 2026, the company's cumulative market obligation since privatisation stood at approximately ₦456.5 billion, comprising ₦415.5 billion due to the Nigerian Bulk Electricity Trading Plc (NBET) and ₦41 billion due to the Nigerian Independent System Operator (NISO).
The company had also accrued other non-market statutory and third-party obligations amounting to ₦14.26 billion. These figures raise fundamental questions about how a strategically important electricity distributor could reach such a precarious position under a regulatory framework designed to promote efficiency, investment and accountability.
More troubling is the fact that this is not entirely a new problem. The 2024 intervention should ordinarily have served as a warning and provided an opportunity for corrective measures. Yet, barely two years later, the company is facing another regulatory intervention with an even more alarming financial exposure. The question, therefore, is not simply why Kaduna Electric has accumulated such enormous obligations, but why previous interventions failed to prevent the situation from deteriorating further.
This is where the Kaduna Electric experience becomes relevant to the broader debate about Nigeria's electricity privatisation. The Federal Government handed over the distribution companies to private investors in 2013 with the expectation that private capital, managerial expertise and commercial discipline would transform the sector. More than a decade later, Nigerians are still confronted with unreliable electricity, inadequate distribution infrastructure, poor metering, commercial losses, billing disputes and increasing pressure for higher tariffs.
The privatisation model was premised on the assumption that private ownership would solve many of the inefficiencies associated with public management. But the experience of Kaduna Electric suggests that ownership alone cannot resolve structural weaknesses in an electricity market where generation, transmission and distribution are deeply interconnected. A financially distressed distribution company cannot operate efficiently when it struggles to collect enough revenue from customers, while customers are understandably reluctant to pay more for electricity that is either unavailable or unreliable.
This creates a vicious cycle. Poor supply encourages consumers and businesses to seek alternative sources of electricity. Heavy dependence on diesel and petrol generators increases the cost of production. Higher operating costs weaken businesses' ability to pay electricity bills. Poor revenue collection then affects the capacity of DisCos to meet their market obligations and invest in infrastructure. The result is a system in which everybody complains, but the underlying structural problem remains unresolved.
The Kaduna Electric crisis also raises questions about accountability. It is important to establish how the company accumulated obligations of this magnitude, what portion arose from inefficiencies within the company, what portion reflects weaknesses elsewhere in the electricity market, and what role successive regulators and market institutions played in allowing the situation to persist. Regulatory intervention should not simply change the composition of a company's board while leaving the circumstances that produced the crisis untouched.
There is also a need to examine the financial relationship between government institutions and electricity distributors. Public institutions are themselves significant electricity consumers, yet government agencies at various levels have frequently accumulated substantial electricity debts. A government that expects households and businesses to pay their electricity bills must lead by example. The same standard of accountability demanded from private consumers must apply to ministries, departments, agencies and other public institutions.
For Northern Nigeria, the implications of Kaduna Electric's crisis are particularly significant. The company serves Kaduna, Kebbi, Sokoto and Zamfara States, a vast area with millions of residents and businesses. These states require reliable electricity to support agriculture, agro-processing, manufacturing, education, healthcare, telecommunications and small businesses. At a time when governments are seeking to stimulate economic activity, create employment and reduce dependence on public-sector jobs, an unreliable electricity supply undermines virtually every development objective.
The crisis therefore should not be reduced to the fortunes of one private company. It should force the Federal Government and NERC to undertake a comprehensive assessment of the electricity distribution model. There must be greater transparency in the financial affairs of DisCos, clear performance benchmarks, credible investment obligations, improved metering, stronger consumer protection and consequences for both private operators and public institutions that fail to meet their obligations.
More importantly, the government must determine whether the present structure remains fit for purpose. If repeated regulatory interventions, accumulated debts and inadequate service continue despite more than a decade of private ownership, then the country must be willing to confront the uncomfortable possibility that the model requires fundamental restructuring.
This does not necessarily mean returning to the old system of government-owned utilities. Nor should it mean another round of indiscriminate bailouts that socialise private-sector losses while consumers continue to bear the burden through tariffs. What Nigeria needs is a commercially viable and publicly accountable electricity market in which investors can recover legitimate costs, consumers receive reliable service and regulators enforce the rules without fear or favour.
The latest intervention by NERC should therefore be more than another attempt to rescue a troubled DisCo. It should be the beginning of a serious national examination of the electricity privatisation model. After more than a decade of privatisation, Nigerians deserve to know whether the system is working--and if it is not, government must have the courage to fix the model rather than continue managing its failures.
COMTEX_491050158/2029/2026-08-20T00:04:54
by Editorial
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