KEY POINTS

• NLC President Joe Ajaero branded Nigeria’s power sector the biggest scam in the country, more than a decade after PHCN’s privatization.
• Generation has stagnated at about 4,000 megawatts, while government subsidies have ballooned from near-zero to trillions of naira.
• Ajaero said 8 to 9 DisCos have effectively been taken over by banks after loan defaults, with operators lacking technical and financial capacity.

Joe Ajaero on Sunday branded Nigeria’s power sector the biggest scam in the country, telling Vanguard that more than a decade of privatization had failed to lift generation past about 4,000 megawatts while consuming trillions of naira in government subsidies.

Ajaero, who is also general secretary of the National Union of Electricity Employees, said the unbundling of the defunct Power Holding Company of Nigeria simply divided the same constrained system among 20 companies without expanding capacity. He framed the sector as a closed loop of regulatory capture serving powerful interests.

Now his intervention lands as the Tinubu administration sets up a Presidential Task Force on Power Sector Reset and Restoration under Special Adviser Rilwan Lanre Babalola, with newly confirmed Power Minister Joseph Tegbe expected to drive the next reform push.

‘They sold inefficiency’

Specifically, Ajaero said the privatization split a 4,000-megawatt system into 20 companies, leaving Eko, Ikeja, Ibadan, Enugu and others sharing the same constrained pool. “It is scandalous and criminal that the total capacity today is still about 4,000 megawatts,” he said.

Indeed, the NLC chief argued the privatization carried a contradiction at its core. The government claimed PHCN was obsolete yet sold it to operators who fought to own the same supposedly outdated assets, with no mandate to expand generation, transmission or distribution.

Moreover, Ajaero pegged PHCN’s pre-privatization sale value at about N400 billion. He said the federal government, which barely subsidized PHCN before privatization, now spends trillions backstopping the same sector under private ownership.

Banks take over

Furthermore, Ajaero said eight or nine distribution companies have effectively passed into bank ownership after their original buyers failed to service the acquisition loans. He said most original buyers lacked the financial muscle and technical competence required, borrowing heavily from local banks rather than attracting foreign direct investment.

“Banks are not electrical engineering companies,” he said, noting that lenders now hire personnel piecemeal to keep DisCos running. The result has been management churn, with one DisCo cycling through almost six managing directors and roughly 900 workers losing their jobs across the sector.

Additionally, Ajaero rejected the Band A, B and C tariff classification, calling it unfair and saying it has turned electricity from a social service into a market service that abandons rural communities unable to pay premium rates.

Generation needs a plan

Meanwhile, Ajaero said the sector needs an actual energy master plan, not another acronym. He pointed to coal-fired plants in South Africa that deliver 2,000 megawatts apiece and noted Germany still depends on coal for roughly 40 percent of its power, while Nigeria sits on vast coal deposits unused.

However, the NLC chief said the country’s real generation potential lies in pairing coal plants with hydroelectric projects at Mambilla and Zungeru, which together could deliver about 5,000 megawatts, with gas stations playing a supplementary role rather than carrying the system.

Today, Ajaero is skeptical of the Tinubu task force, asking whether any new power plants are under construction for commissioning in two to three years. He said reinforcing existing lines without adding generation capacity will not deliver stable supply, and that the country needs to declare a clear megawatt target and pursue it deliberately.

Together with the bank-controlled DisCos, the stagnant generation and the Band A-driven tariff regime, Ajaero’s diagnosis casts the sector as structurally trapped between political patronage and commercial extraction. Whether Tegbe and Babalola can break that loop will determine if the next megawatt actually reaches Nigerian households, or simply joins the trillions already spent without effect.