Business
State electricity markets risk losing investors without harmonised regulations – FCCPC
The Federal Competition and Consumer Protection Commission (FCCPC) has warned that Nigeria’s emerging state electricity markets could struggle to attract investment if states adopt different regulatory frameworks, stressing the need for stronger cooperation among electricity regulators to protect consumers and provide certainty for investors.
The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, gave the warning on Thursday at a stakeholders’ engagement on consumer protection and regulatory cooperation in Nigeria’s electricity sector in Abuja.
The meeting brought together officials of the Nigerian Electricity Regulatory Commission (NERC), the Nigerian Electricity Management Services Agency (NEMSA) and several state electricity regulatory commissions following the decentralisation of electricity regulation under the Electricity Act 2023.
The electricity act, signed in 2023, ended decades of exclusive federal control of Nigeria’s electricity sector by empowering states to establish and regulate their own electricity markets once they meet constitutional and regulatory requirements. Since then, several states, including Lagos, Enugu, Plateau and Anambra, have established electricity regulatory commissions as part of efforts to improve electricity supply and attract private investment.
However, stakeholders have repeatedly warned that inconsistent regulations across states could discourage investment, increase compliance costs for operators and create uneven levels of consumer protection.
Consumer confidence
Mr Bello described the Electricity Act as one of the most significant reforms of Nigeria’s electricity sector, saying its success would depend largely on effective collaboration among federal and state regulators.
“The Electricity Act of 2023 represents one of the most significant reforms of Nigeria’s electricity sector in recent years,” he said.
“Beyond creating new opportunities for investment and improved service delivery, it has fundamentally reshaped our regulatory architecture,” he added.
According to him, while states now have greater flexibility to regulate their electricity markets in line with local realities, consumers should enjoy the same level of protection regardless of where they live.
He noted that electricity users are primarily concerned about reliable service and fair treatment rather than the agency responsible for resolving their complaints.
“Consumers experience electricity as one system. When supply is interrupted, or a bill appears incorrect, they are not concerned about which regulator has jurisdiction. They simply expect protection, ensuring that our institutions work seamlessly together in our responsibility and not theirs.”
Mr Bello explained that although NERC regulates the electricity industry, NEMSA enforces technical standards, state commissions oversee intrastate electricity markets, while the FCCPC provides economy-wide consumer protection and competition oversight.
According to him, these responsibilities should complement rather than compete with one another.
“Our objective is to consult, exchange information, support one another’s lawful actions, and ensure consumers receive timely and effective protection,” he said.
The FCCPC boss cited the suspension of the proposed replacement of obsolete Unistar prepaid meters in 2024 as an example of effective collaboration among regulators.
PREMIUM TIMES previously reported that consumer groups raised concerns over plans to replace obsolete prepaid meters amid fears that electricity customers could be forced to bear the cost or be subjected to estimated billing during the process.
Mr Bello said the FCCPC convened discussions involving NERC, NEMSA and electricity distribution companies after the concerns emerged.
The replacement exercise was subsequently suspended pending compliance with regulatory requirements before NERC later issued an order providing a structured framework for replacing faulty and obsolete meters.
“The order guaranteed that consumers would not bear the cost of replacing obsolete meters, would not experience interruption of electricity supply during the replacement exercise, and would not be subjected to estimated billing because of delays in implementation,” he said.
He added: “Those safeguards reflected the principle that consumers should never be disadvantaged because infrastructure has reached the end of its useful life through no fault of their own.”
He noted that the effectiveness of regulation should be measured not only by complaints resolved but also by the number of disputes prevented.
“Strong regulation is not built on institutional rivalry. It is built on cooperation, mutual respect, and a shared commitment to the public interest,” he said.
Investors need certainty
Also speaking, NERC’s Assistant Director and Head of Consumer Protection Department, Anthony Essien, said harmonised regulations would become increasingly important as more states establish independent electricity markets.
He warned that differing regulations across states could complicate investment decisions and discourage investors operating across multiple jurisdictions.
“It would not be easy, especially looking at investors coming in and having different standards across 36 states. But if we come together and foster a unified and well-thought-out effort to bring forward laws, it would further strengthen our mandates across the different states.”
He said the FCCPC has become an important partner in NERC’s consumer complaints mechanism and now participates in the commission’s Consumer Complaints Forum.
READ ALSO: FCCPC, Lagos consumer agency warn businesses on price tags, refunds, product labelling
The Chairman of the Enugu State Electricity Regulatory Commission, Chijioke Okonkwo, described the engagement as timely, saying collaboration with federal regulators would help state commissions strengthen consumer protection.
Similarly, the Chairman of the Anambra State Electricity Regulatory Commission, Frank Nwoye Okafor, cautioned that fragmented regulations could become a major obstacle to investment.
“The biggest nightmare for an investor is trying to figure out 36 different rules. But if we have this sort of coordination, then we start singing from the same hymn sheet,” Mr Okafor said.
The Electricity Act 2023 is regarded as Nigeria’s most far-reaching electricity reform since the power sector was privatised in 2013. By allowing states to regulate intrastate electricity markets, the law seeks to expand electricity access, attract private investment and improve service delivery.
However, as more states establish independent electricity markets, regulators and industry stakeholders say harmonised regulations and coordinated oversight will be critical to maintaining investor confidence, avoiding regulatory fragmentation and ensuring consumers receive the same level of protection regardless of where they live.
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The Nigerian government has identified regional coordination, scientific cooperation, effective enforcement, and sustainable financing as key strategies to establish effective high-seas marine protected areas (MPAs) across West Africa and beyond.
Nigeria outlined the strategies on Monday through Sikeade Egbuwalo, the country’s focal point for the Convention on Biological Diversity (CBD), during a high-level segment organised by the BBNJ First Movers for the 30×30 target.
The BBNJ First Movers is a government collaboration led by Chile to fast-track the creation of the first generation of high seas Marine Protected Areas (MPAs) under the UN High Seas Treaty (BBNJ Agreement).
The BBNJ Agreement, formally known as the Agreement on the Conservation and Sustainable Use of Marine Biological Diversity of Areas Beyond National Jurisdiction, provides an international framework for protecting marine biodiversity in areas beyond national jurisdiction.
Chile led the initiative to lay immediate groundwork for protecting international waters as the treaty moves into implementation, with its first Conference of the Parties scheduled to be held in New York in January next year.
Responding to a question on how regional coordination could drive the creation of effective high-seas MPAs to protect West African waters and achieve the 30×30 target, Mrs Egbuwalo said ocean conservation required countries to work together because marine ecosystems and the livelihoods they support transcend national boundaries.
“For Nigeria, the message is simple: the ocean does not recognise national boundaries, and neither should our conservation ambitions,” she said.
She added that the health of shared marine ecosystems is critical to the livelihoods of millions across West Africa, making regional cooperation essential to effective marine protection and meeting the global biodiversity target.
The 30×30 target, adopted under the Kunming-Montreal Global Biodiversity Framework, seeks to conserve at least 30 per cent of the world’s land and sea areas by 2030.
Meanwhile, over the past two decades, the high seas and maritime areas off West Africa have faced severe environmental, economic, and security challenges, largely due to weak regulation, foreign exploitation, and climate pressures.
While national governments try to control territorial waters and Exclusive Economic Zones (EEZs)/Free Trade Zones, the vast high seas beyond these limits have historically functioned as an under-regulated “Wild West,” leaving them vulnerable to overexploitation and illicit activity.
As a result, the Gulf of Guinea and West African shipping lanes have faced high risks of piracy, armed robbery, and attacks on oil tankers, bulk carriers, and fishing vessels, prompting West African seas to be deemed the “world’s most dangerous seas”.
Regional coordination
In her interventions on Monday, Mrs Egbuwalo said Nigeria was working with six other West African countries through the West Africa BBNJ Coordination Committee to advance a proposal for a highly and fully protected high-seas MPA in the Guinea–Canary Currents Convergence Zone.
She said the initiative showed how regional cooperation can turn shared conservation priorities into concrete action by building political ownership, strengthening consensus, and sustaining commitment throughout the process.
Mrs Egbuwalo said achieving the 30×30 target requires more than designating percentages of the ocean for protection, stressing the need for ecologically representative, connected, and effectively managed MPA networks.
According to her, the Guinea–Canary Currents Convergence Zone supports important biodiversity, migratory species and fish populations that connect the high seas with national waters.
She said regional collaboration would let countries pool scientific expertise, share marine data, and identify areas where protection could deliver the greatest ecological benefits.
Livelihoods and food security
The Nigerian official also stressed the need to align marine conservation with fisheries management, food security and coastal livelihoods.
She said Nigeria’s assessment of the proposed regional MPA had considered marine species of nutritional, economic and cultural importance to coastal communities.
This, she said, underscored the importance of engaging artisanal fishers, women involved in fish processing and trade, and other ocean users in the conservation process.
“Conservation and livelihoods must reinforce each other, rather than be treated as competing priorities,” she said.
Monitoring and enforcement
Mrs Egbuwalo identified effective monitoring, control, and enforcement as another critical requirement, warning that marine protected areas must be genuinely protected, not merely designated on paper.
She said a regional assessment of monitoring, control and surveillance capacities had identified existing mechanisms that could be strengthened.
She added that regional cooperation could facilitate joint monitoring, satellite surveillance, sharing vessel-tracking information and collaborating with regional fisheries bodies.
According to her, management and enforcement arrangements must be incorporated from the earliest stages of MPA development.
Additionally, she noted that establishing and managing high-seas MPAs required substantial scientific, technical and financial resources.
She argued that regional cooperation could help countries pool capacities, identify shared needs and attract international partnerships while maintaining regional ownership of conservation initiatives.
READ ALSO: CBD COP17: Namibian Biosafety Expert Martha Kandawa-Schulz dies in Yerevan
As countries prepare for the first Conference of the Parties to the BBNJ Agreement, she called for developing countries to have meaningful access to finance, technology and capacity-building support to participate effectively in its implementation.
Call for implementation
With less than four years remaining to achieve the 2030 biodiversity target, Ms Egbuwalo urged countries to move from ambition to implementation.
She described the proposed Guinea–Canary Currents high-seas MPA as an opportunity to demonstrate how African regional leadership could deliver meaningful protection for the global ocean.
She also identified the sixth International Marine Protected Areas Congress (IMPAC6), scheduled for Dakar in March 2027, as an opportunity to strengthen political momentum and partnerships for the first generation of high-seas MPAs.
She said Nigeria remained committed to working with West African partners and the international community to advance the initiative.
“30×30 is not simply about how much ocean we protect, but how effectively we protect it,” she said, adding that regional cooperation could help West Africa protect biodiversity, strengthen ocean resilience and secure coastal livelihoods.
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