“Power Sector Was Never Privatised to Work” — Ajaero
More than a decade after the privatisation of the defunct Power Holding Company of Nigeria, Nigeria’s electricity sector remains trapped in a cycle of stagnation, mismanagement, and institutional failure — and the country’s most prominent labour voice is pulling no punches about why.
Joe Ajaero, President of the Nigeria Labour Congress and General Secretary of the National Union of Electricity Employees, has described the power sector as “the biggest scam in the country,” alleging that a powerful clique now controls who becomes Minister of Power and who chairs the Nigerian Electricity Regulatory Commission.
“That is what is happening today,” Ajaero said in a widely circulated interview, warning that regulatory capture has effectively made meaningful reform nearly impossible.
At the heart of Ajaero’s indictment is a fundamental charge: that privatisation was never designed to improve electricity supply. Nigeria’s total generation capacity remains approximately 4,000 megawatts, the same figure recorded before the 2013 unbundling of PHCN into 20 successor companies.
“We told them that if they privatised and split the system into 20 companies, it would still be the same 4,000 megawatts they were sharing. And that is exactly what happened,” he said.
Ajaero also turned his attention to the sector’s financing structure, revealing that most DisCo acquisitions were funded not by foreign direct investment but by local bank loans, leaving banks effectively running electricity companies they were never equipped to manage.
“Almost eight or nine DisCos have been taken over by banks. But banks are not electrical engineering companies,” he noted.
On the controversial electricity banding system, under which Nigerians pay higher tariffs for more hours of supply, Ajaero was equally direct. “As long as this banding system exists, many parts of the country will continue to suffer poor supply,” he said, arguing that electricity had ceased to function as a social service.
He also questioned the rationale of billions in government subsidies flowing into a privatised sector, noting that before privatisation, government committed virtually nothing to PHCN’s operations.
“The assets were privatised for about N400bn, and these operators were already collecting substantial revenues from day one. Yet government has reportedly committed trillions of naira to support the sector. That is the question Nigerians should ask,” Ajaero stated.
On the newly constituted Presidential Task Force on Power Sector Reset and Restoration, Ajaero expressed cautious scepticism, insisting its value would be determined entirely by whether it prioritised increasing generation capacity above all else.
“If that task force is not focused on how Nigeria can sustainably move from about 4,000 megawatts to a significantly higher capacity, then it serves little purpose,” he said.