The Federal Ministry of Power has announced plans to sanction poorly performing electricity distribution and generation companies as part of efforts to improve power supply and support Nigeria’s industrial growth.

The Minister of Power, Joseph Olasunkanmi Tegbe, disclosed this on Wednesday in a policy brief presented by his Special Adviser, Martins Olajide, at the NESG Industrialisation and Competitiveness Forum.

Tegbe said the ministry would introduce performance scorecards covering personnel in the power sector as well as Distribution Companies (DisCos) and Generation Companies (GenCos).

He explained that the system would recognise strong performance while imposing sanctions on operators that fail to meet established targets.

According to the minister, the scorecards are intended to improve accountability throughout the electricity value chain by giving operators measurable standards against which their performance can be assessed.

He also announced plans for tariff reforms designed to protect vulnerable electricity consumers while ensuring that service providers meet their obligations and maintain a reliable supply of electricity.

The minister said the proposed measures are part of an eight-point agenda aimed at stabilising the power sector, restoring discipline in the electricity market and improving governance across the value chain.

Tegbe noted that although Nigeria has about 13,625 megawatts of installed electricity generation capacity, only an average of 4,854MW is available to the national grid each day.

He said this means roughly 62 per cent of the country’s installed capacity remains unavailable, even as actual peak electricity demand is estimated at about 20,000MW.

“The power arithmetic does not add up,” the minister said, highlighting the disparity between the country’s installed capacity, actual generation and rising electricity demand.

He attributed the growing reliance on alternative sources of electricity among households and businesses to the persistent shortfall in grid supply.

Tegbe further disclosed that Nigerians spent an estimated N16.5 trillion on self-generated electricity in 2023, compared with approximately N1 trillion generated as revenue by the national grid.

Citing World Bank estimates, he said Nigeria’s inadequate electricity supply imposes an annual economic cost of about $25 billion, representing between five and seven per cent of the country’s Gross Domestic Product.

The minister said addressing these structural challenges remains critical to improving productivity, reducing dependence on self-generation and creating a more competitive environment for businesses and industries.