Electricity supply in Lagos runs on a visible class system. A building’s power supply is determined by its residents’ economic power. In practice, these bands shape far more than electricity access. They influence where people choose to live, how much they spend on diesel and generators, whether small businesses can survive blackouts, and even how desirable entire neighborhoods become. The Service-Based Tariff (SBT) system, under which electricity bands operate in Nigeria, was introduced by the Nigerian Electricity Regulatory Commission (NERC) in 2020. According to the NERC framework, the key idea behind the policy was to move Nigeria away from a flat, inefficient tariff system to a fairer one directly tied to the quality and quantity of electricity supply received by customers. In other words, what one pays would reflect what they actually get.
Over time, this structure has had a different social effect. Rather than guaranteeing fairness and improved service delivery, banding has increasingly turned reliable electricity into a luxury good associated with wealthier estates and higher-income communities, instead of a basic public necessity that should be a guaranteed right for every citizen.
Now, the Lagos State Government says it wants to eliminate that classification system entirely.
At an inter-ministerial briefing this week, Lagos Commissioner for Energy and Mineral Resources, Biodun Ogunleye, said the state is working toward an environment where electricity banding becomes unnecessary. Instead of debating whether residents deserve 4, 8, or 20 hours of light daily, the government says its focus is on making 24-hour electricity possible through embedded power generation and partnerships with private investors. This sounds ambitious, even revolutionary, for a state that powers Nigeria’s commercial heartbeat. But for many Lagosians, the announcement immediately raises a harder question: is this a genuine structural solution, or another ambitious electricity promise in a country where governments at both federal and state levels have repeatedly failed to fix power supply?
Nigeria’s electricity band system was designed as a rationing framework. Customers are grouped based on the minimum number of hours they are expected to receive electricity daily: According to Cable Index, Nigeria’s electricity band classifications as of January 2026 place customers in Band A for a minimum of 20 hours of daily supply, Band B for 16 hours, Band C for 12 hours, Band D for 8 hours, and Band E for 4 hours. In theory, customers paying higher tariffs receive a more stable supply. In practice, many Lagosians argue that the system institutionalizes inequality. Entire communities became known for unreliable power, while wealthier estates and commercial hubs often enjoyed better electricity because they were strategically located for distribution companies. The electricity banding system was designed to improve accountability by linking what customers pay to a guaranteed level of service, with distribution companies expected to deliver the minimum hours associated with each band. In theory, this meant clearer expectations and better discipline across the power sector, since communities would be grouped based on measurable supply levels and tariff payments aligned with those standards. In practice, however, many residents argue that these guarantees have not materialised consistently.
Across several communities, even those classified under lower bands report that the promised minimum hours are often not met, with some areas experiencing prolonged outages that stretch into days or even weeks. In fact, the inequality in pricing is not limited to urban areas alone. According to the Rural Electrification Agency, some rural communities powered through mini-grid and solar projects now pay tariffs that exceed those of Band A customers, with costs in certain locations reaching as high as ₦250 to ₦280 per kilowatt-hour. This means that access to electricity in Nigeria is not only uneven in terms of reliability, but also increasingly fragmented in terms of cost, depending on location and infrastructure model. This gap between the framework and lived reality has deepened public frustration, as the system intended to formalise reliability has instead highlighted how far actual supply still falls short of official benchmarks.
This is why Ogunleye’s comments resonates. Eliminating bands symbolically suggests that no Lagosian will be permanently categorized as deserving less electricity than another. But symbolism alone does not solve the deeper problem. One of the biggest questions hanging over Lagos’ plan is whether the state can truly deliver more electricity or simply redistribute existing shortages differently. The commissioner announced that Lagos is targeting an additional 2,000 megawatts through embedded generation projects and private sector partnerships. Embedded power refers to smaller-scale electricity generation projects located closer to consumers rather than relying entirely on the national grid. The state government has long argued that depending solely on the federal grid limits the state’s economic growth. The state already has 12 independent power producers under regulation, with seven commercially operational. Still, reality cannot be ignored: distribution is not generation, and reforms mean little without sufficient overall electricity generation.
Business analyst Chika Mbonu argues that Lagos cannot meaningfully eliminate electricity banding without first confronting the reason the system exists in the first place: scarcity. Speaking to ARISE News, Mbonu described the band structure as essentially a rationing mechanism created because Nigeria does not generate enough electricity to meet demand. Customers on higher bands pay more in exchange for longer supply hours because available power is limited and must be prioritized. In his view, removing the classifications without dramatically expanding generation capacity risks changing the labels without changing the underlying reality. He noted that Lagos alone is estimated to require between 9,000 and 12,000 megawatts to properly serve homes, businesses, and industries, far beyond what it currently receives from the national grid.
Nigeria’s electricity crisis has never been just about billing structures or transmission inefficiency. The country does not generate enough stable power to meet its population and economic demand. Even when distribution companies improve infrastructure, there is often not enough electricity available to be distributed consistently. That is why skepticism remains high. Lagos may license more distribution operators, rehabilitate power lines, and attract investors, but unless embedded generation projects genuinely add significant new power capacity, many residents fear this could become another reshuffling exercise that changes labels more than lived experience.
The state government argues that Lagos cannot wait indefinitely for federal solutions. For decades, electricity has largely remained under federal control, and successive administrations have struggled to deliver stable national power despite repeated reforms, privatizations, and tariff adjustments. Lagos is now attempting a more localized strategy by encouraging private-sector-led embedded generation within the state. This approach has advantages. Power generated closer to consumers could reduce transmission losses. Industrial and commercial areas may receive more stable electricity. Lagos could gradually build semi-independent energy clusters less reliant on the national grid. Private investment may also move faster than federally coordinated infrastructure projects. There is also precedent for localized success. Certain estates, business districts, and industrial clusters in Lagos already operate relatively stable independent or hybrid electricity systems.
Scale remains a challenge. Providing reliable electricity to a few high-income estates is very different from delivering a consistent supply to millions across densely populated communities like Aboru, Agege, Ikorodu, Ajegunle, or Mushin. The infrastructure demands are enormous, and many Lagosians worry that “24-hour power” could end up benefiting select economic zones while ordinary residential areas continue facing erratic supply. If Lagos eventually removes electricity bands, the impact would go far beyond utility bills. Electricity reliability already shapes Lagos real estate. Areas known for stable power often attract higher rents and property values because residents spend less on generators, diesel, and inverter systems. If supply becomes more evenly distributed, some lower-income neighborhoods could become more attractive to renters and businesses. But if disparities continue unofficially despite band removal, the market may simply create new informal hierarchies based on actual lived electricity experience rather than official classifications.
For small businesses, electricity is survival. Salons, frozen food sellers, cybercafes, tailoring shops, restaurants, pharmacies, and content studios all depend heavily on generators because public supply remains unreliable. Many already spend significant portions of their income on fuel. If embedded generation genuinely improves supply consistency, operating costs could fall significantly. Businesses might spend less on diesel, reduce equipment damage caused by power fluctuations, and extend working hours.
Electricity banding became politically sensitive because it created visible “winners” and “losers.” Residents currently receiving near-constant electricity may resist reforms if they believe supply will become less reliable in pursuit of broader equality. Meanwhile, underserved communities may support the idea emotionally while remaining skeptical that actual improvements will reach them.
If the state cannot move beyond announcements into measurable generation capacity, then this new policy is nothing more than wishful thinking. Right now, the biggest weakness in the government’s messaging is that the vision outpaces the infrastructure. Lagos can rehabilitate power lines and license more operators, but stable electricity ultimately depends on producing enough power consistently and distributing it efficiently across an enormous urban population. The commissioner’s comments reflect a bold political ambition: turning Lagos into a city less dependent on the failures of the national grid. Economically, the idea makes sense. Lagos cannot realistically position itself as Africa’s leading megacity while businesses and households still organize daily life around generators and fuel scarcity.
But Nigerians have also been hearing promises of stable electricity for decades.
If residents stop seeing official classifications but continue experiencing wildly unequal access to power, many may view the reform as cosmetic. Still, the proposal reveals something important about where Nigeria’s energy debate is heading. Increasingly, states are asking whether waiting for a centralized federal solution is sustainable at all. And in a country where electricity shortages shape everything from economic productivity to quality of life, Lagos’ experiment, if successful, could become a model other states eventually try to follow.
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