The approval of the Grid Asset Management Company (GAMCO) by the Federal Government has sparked controversy among stakeholders in Nigeria’s electricity sector, with experts raising concerns over possible duplication of roles and legal implications.
The Federal Executive Council (FEC) approved the establishment of GAMCO during its meeting on Wednesday as part of efforts to address persistent national grid failures and blackouts.
Announcing the decision after the meeting, the Minister of Information and National Orientation, Mohammed Idris, said the new company is expected to strengthen the electricity transmission value chain.
“The President has seen that where the problem is mainly in our quest to solve the power problem is largely in the transmission section,” Idris said, noting that the initiative is aimed at improving the reliability of the national grid.
However, the development has drawn criticism from industry stakeholders who fear the new company may duplicate the functions of existing institutions such as the Nigeria Independent System Operator (NISO) and the Transmission Company of Nigeria (TCN).
The Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, questioned the legality of the new entity under the Electricity Act 2023 and its potential overlap with the responsibilities of existing bodies.
“This raises many questions. What is NISO’s role? Is this formation in accordance with the EA 2023? Is the Transmission Service Provider being phased out or will it operate side by side? What asset is this GAMCO going to manage?” she asked.
Similarly, the President of the Nigeria Consumer Protection Network, Kunle Olubiyo, warned that the move could result in significant job losses within TCN.
“What happens to the existing staff of the current Transmission Company of Nigeria?” Olubiyo queried.
The controversy comes amid ongoing challenges in Nigeria’s power sector, including a recent drop in electricity supply, which NISO attributed to a shortage of gas for power generation.
The sector has also been under pressure due to a lingering dispute between power generation companies and labour unions over the N6.6 trillion legacy debt owed to electricity producers.