Nigeria’s GAMCO Plan Sparks Power Sector Reform Debate

Nigeria, Africa’s most populous country located in West Africa, which has long struggled to maintain a regular and reliable electricity supply to its citizens, last Friday set up an 11-member committee to oversee the creation of the Grid Asset Management Company Limited (GAMCO).

According to the Chief of Staff to the President, Femi Gbajabiamila, the committee will conduct a comprehensive review of existing laws, regulations, policies, and institutional frameworks governing the electricity value chain, including generation, transmission, distribution, and market operations.

The committee will also examine the implications of the Electricity Reform Laws (2025) and related unbundling arrangements on asset ownership, management, and regulatory oversight.

Among other responsibilities, it will identify areas of conflict, overlap, or inconsistency between the proposed GAMCO framework and existing legal and regulatory instruments.

The committee will also assess the legal status, ownership structure, and contractual obligations of the Niger Delta Power Holding Company (NDPHC) and the National Integrated Power Project (NIPP) assets, including the Omotosho, Olorunshogo, and Ihovbor power plants, which GAMCO plans to use during its pilot phase.

It will further evaluate the interface between GAMCO’s proposed mandate and the statutory functions of the Nigerian Electricity Regulatory Commission (NERC), and determine the fiscal, financial, and market implications of the proposal, including subsidy exposure, market liquidity, and revenue frameworks.

In addition, the committee will determine whether the establishment and operationalisation of GAMCO will require amendments to primary legislation, subsidy regulations, and executive directives.

However, the President’s decision to set up a committee to oversee the creation of GAMCO has ignited debate among power sector stakeholders, with some suggesting that the move indicates a lack of confidence in existing power sector institutions to resolve the country’s longstanding electricity crisis.

While some industry players believe GAMCO could be a game changer, others argue that it may add little value, citing the Presidential Power Initiative, which they say has failed to deliver the expected results.

In an interview with the Daily Trust, Prof. Dayo Ayoade, an energy law expert at the University of Lagos, said the inability of the transmission sector to wheel electricity to distribution companies remains a well-known bottleneck in the sector.

According to him, the creation of a commercial grid asset management company would mean the government continues to own the grid while its operations are run on a commercial basis.

He said the concept could attract private investment capital and help Nigeria recover stranded generation capacity.

“But we should think more deeply about this because the success of power sector reform depends on good governance, and we have little evidence of that,” he said.

“This amounts to a proliferation of institutions in the power sector. We already have too many conflicting and overlapping institutions, which could create more policy instability. In my view, these ad-hoc reforms often create new problems while trying to solve existing ones.”

Ayoade added that the power sector requires comprehensive reforms and stronger governance.

“It requires a holistic, top-to-bottom review that would streamline current institutions, eliminate duplication, and reduce the overall cost of managing these institutions. More importantly, we need total transparency of information and publicly available data so independent experts can assess the true state of the power sector.”

Meanwhile, Adetayo Adegbemle, Executive Director of PowerUp Nigeria, a consumer advocacy group, said the creation of GAMCO raises more questions than answers.

“What is happening with the Presidential Power Initiative or FGN PowerCo? Isn’t there an overlap of functions with GAMCO? What exactly is the end objective of GAMCO, and how will it interface with other stakeholders?”

He questioned how the proposed company would interact with the Ministry of Power, the Nigeria Integrated Energy Plan, and existing sector institutions.

Adegbemle warned that the continued creation of new agencies could further complicate the sector while Nigerians are still waiting for solutions to the country’s electricity challenges.

However, Barr. Bode Fadipe, Chief Executive Officer of Sage Consulting & Communications, believes the initiative could create the right environment for meaningful reform.

“Looking at the composition of the committee, there are eight ministers with the Chief of Staff as Chairman. The position of the Chief of Staff is strategically important in this matter,” he said.

He noted that the committee also includes three Senior Advocates of Nigeria, the Attorney-General of the Federation Festus Keyamo, and electricity law expert Yemi Oke, indicating that the enabling legislation would likely undergo careful legal scrutiny.

According to Fadipe, the inclusion of the Chairman of the Nigeria Revenue Service suggests that the government recognises the power sector’s potential as a major revenue source if properly managed.

Energy expert Othman Quchi, however, argued that the sector appears to be moving in reverse.

He noted that the Federal Executive Council approved the company before the committee was set up to determine its operational details.

“You would think the objectives would have been clearly defined before establishing the company,” he said.

Quchi warned that GAMCO could become merely a temporary fix if it fails to address the root causes of Nigeria’s electricity sector challenges.

“Fixing existing structures and tackling governance and liquidity issues head-on is the way forward. Adding another company may only increase bureaucracy.”

He added that institutions such as Transmission Company of Nigeria (TCN), NDPHC, and FGN PowerCo already deal with aspects of transmission infrastructure.

“There is a need for streamlining to ensure a holistic and harmonised approach to transmission issues, including alignment with Nigerian Independent System Operator (NISO) on resolving dispatch bottlenecks.”