Nigeria Government Blocks Planned Privatization of State-Owned Electricity Transmission Company
London-UK, December 12, 2025
Nigeria Halts Power Grid Sale: Policy Reversal Hits Investor Confidence
In a sudden and high-profile policy reversal, the Nigerian government has officially announced it Halts Power Grid Sale, effectively blocking the planned privatization of the Transmission Company of Nigeria (TCN), the state-owned entity responsible for managing the nation’s fragile electricity grid.
The decision, which comes after months of intense deliberation and a strong push from international creditors and domestic reform advocates, signals a major setback for President Bola Ahmed Tinubu’s ambitious economic liberalization agenda.
The TCN Planned Privatization was viewed as the single most critical step needed to attract foreign capital and expertise to fix Nigeria’s chronically underperforming power sector, which has severely constrained economic growth.
The move to Blocks Planned Privatization was announced by the Minister of Power, who cited “strategic national security concerns” and the need for “further structural reforms” before the Transmission Company of Nigeria (TCN) could be reliably transferred to private hands.
The TCN, often referred to as the weakest link in Nigeria’s privatized electricity value chain, remains entirely state-owned despite the privatization of the generation and distribution companies over a decade ago.
Its dilapidated and overloaded infrastructure is routinely blamed for the systemic collapses of the national grid, a crisis that has severely constrained the productivity of Africa’s largest economy.
The policy reversal immediately raises questions among investors about the government’s commitment to difficult, deep-seated structural reforms in the face of political and labour opposition.
Headlines Points
Privatization Blocked:
The Nigerian government officially Halts Power Grid Sale, preventing the Planned Privatization of the state-owned Transmission Company of Nigeria (TCN).
Policy Reversal:
The move is a major policy reversal for the Tinubu administration, which had made power sector reform a central pillar of its economic agenda.
National Security Cited:
The government cited “strategic national security concerns” and the TCN’s “systemic importance” as reasons to Blocks Planned Privatization.
Investor Confidence Hit:
The decision is expected to negatively impact investor confidence, which was already fragile due to regulatory inconsistencies and currency volatility.
Structural Weakness Remains:
The failure to privatize the TCN leaves the central weakness of Nigeria’s electricity sector—its unreliable grid—unresolved, further constraining economic growth.
The Weakest Link in the Chain
The history of Nigeria’s power sector reform has long focused on fixing the TCN. While the generation companies (GENCOs) and distribution companies (DISCOs) were sold off in 2013, the government retained control of the transmission grid, which has suffered from decades of under-investment.
The grid’s inability to reliably wheel power from the GENCOs to the DISCOs is the primary cause of the frequent blackouts and system collapses that plague Nigerian households and businesses.
A successful privatization of the TCN, it was argued, would bring in the necessary capital, technology, and management expertise to upgrade the infrastructure and stabilize the national grid.
However, the privatization faced strong headwinds from powerful labour unions and political factions who argued that selling off a critical national security asset was reckless.
The government’s sudden capitulation to this pressure suggests an unwillingness to push through politically difficult reforms.
The government’s prior failed attempt in November to impose a fuel tax, which was reversed following public backlash, further exposes the tensions within the administration over the pace and depth of economic reform.
Impact on Energy and Economy
The decision to Blocks Planned Privatization has immediate negative implications for the Nigerian economy. Reliable power supply is the single biggest bottleneck to industrialization and GDP growth in Nigeria.
Without a stable and expanded transmission grid, the country cannot fully utilize its generation capacity, forcing businesses to rely on expensive and polluting diesel generators.
Furthermore, the policy reversal sends a worrying signal to foreign direct investors (FDIs). Successful privatization hinges on predictable policy and regulatory stability.
This sudden change in direction, regardless of the stated “national security concerns,” is likely to be viewed by the international investment community as a sign of policy inconsistency and regulatory risk.
The failure to address the TCN’s structural weakness means that Nigeria’s core economic constraint—its power crisis—will likely persist, further compounding the challenges of high inflation and currency volatility facing the Tinubu administration.
The focus now shifts to whether the government can, or will, commit sufficient state funds and technical capacity to upgrade the TCN itself in the absence of private sector expertise.
