The Centre for the Promotion of Private Enterprises (CPPE) has warned that Nigeria’s ₦4 trillion power sector debt is no longer fiscally sustainable without urgent structural reforms, improved transparency, and credible, phased implementation.
In a policy brief on power sector reform signed by its Chief Executive Officer, Dr. Muda Yusuf, the Centre described the electricity sector as one of the most difficult components of Nigeria’s economic reform agenda, largely due to its tightly linked value chain covering gas supply, generation, transmission, and distribution.
According to CPPE, the failure to adopt a fully cost-reflective tariff regime—driven by social and political sensitivities—has deepened subsidy dependence and widened the sector’s financing gap.
The Centre noted that recent macroeconomic reforms, including foreign exchange unification and fuel subsidy removal, have intensified cost-of-living pressures, making electricity tariff adjustments more contentious.
“A major constraint to reform is the continued capping of electricity tariffs on affordability grounds,” CPPE said, warning that without cost-reflective pricing, the sector lacks the liquidity needed to sustain operations or attract fresh investment.