We’re not where we ought to be, but we are somewhere very strategic - Abdullahi

-SPECIAL REPORT- 

Nigeria’s Electricity Paradox: Challenges, Reforms, and the Road Ahead

Despite being Africa’s largest economy and blessed with abundant natural resources, Nigeria continues to grapple with persistent electricity shortfalls. With over 85 million citizens lacking access to reliable power, the implications for economic growth, public welfare, and national development are profound. Yet, beneath the surface of these challenges lies a complex web of reforms, strategic decisions, and untapped potential.

The State of Electricity in Nigeria

Nigeria currently generates and distributes around 6,000 megawatts (MW) of electricity, an improvement from 4,000 MW prior to 2023. However, this is far below the estimated 35,000 MW required for full national coverage. The country’s energy mix is heavily skewed toward gas (86%), with hydro contributing 12% and renewables barely registering.

While 60% of Nigerians have access to electricity, the quality and consistency of supply remain poor. Frequent outages, voltage instability, and aging infrastructure plague both urban and rural areas. The result is widespread reliance on diesel generators, which now account for nearly 40% of electricity consumed in the country.

Reforms and Policy Shifts

Electricity Act 2023

This landmark legislation decentralizes Nigeria’s power sector, allowing states to generate, regulate, and distribute electricity independently. While the policy is transformative, implementation has been slow due to limited technical capacity and financial resources at the state level.

Energy Audits and Efficiency Campaigns

The Energy Commission of Nigeria (ECN) has conducted nationwide audits to identify inefficiencies in energy use. Many public and private facilities still rely on outdated appliances, leading to unnecessary consumption and higher costs.

Renewable Energy Push

Nigeria is pivoting toward solar energy, leveraging its abundant sunlight. The ECN aims to “solarise” the country, reducing dependence on the national grid and fossil fuels. Plans are underway to manufacture solar panels and battery systems locally to drive down costs.

Strategic Electricity Exports

Despite domestic shortages, Nigeria exports about 6% of its electricity to neighboring countries like Benin Republic. These exports are primarily hydro-based and serve strategic diplomatic purposes. Shared waterways and dam placements require cooperation to avoid environmental and operational conflicts. As ECN Director-General Mustafa Abdullahi explains, “We’re not doing it to sell, but it is strategic and economically driven.”

Electric Vehicles and Innovation

The ECN is championing electric vehicle (EV) adoption, using free trade zones to promote local manufacturing of EVs and energy components. The commission itself has transitioned to EVs, offering public charging stations as a model for sustainable mobility.

Economic and Social Impacts

Industrial Constraints

High energy costs and unreliable supply hinder manufacturing, reduce productivity, and discourage investment. Nigeria loses an estimated $28 billion annually due to power outages, about 2% of its GDP.

Healthcare and Education

Hospitals face equipment failures and medicine spoilage during outages. Schools struggle with digital learning disruptions, and students often lack lighting to study at night.

Environmental Degradation

Widespread generator use contributes to air pollution and carbon emissions. In rural areas, reliance on wood-based fuels exacerbates deforestation and health risks.

Lessons from Ghana and Kenya

Ghana’s Grid Stabilization

Ghana has implemented reforms such as the Cash Waterfall Mechanism, smart metering, and public-private partnerships like the Enclave Power Model, achieving near-perfect uptime and 99% revenue collection.

Kenya’s Renewable Revolution

Kenya generates over 82% of its electricity from renewables, with geothermal leading the charge. Smart grid technology, real-time monitoring, and inclusive energy policies have expanded access to over 75% of the population.

Unexplored Perspectives

·       Governance Gaps: Fragmented oversight and regulatory uncertainty hinder progress.

·       Human Capital: States lack trained personnel to manage decentralized systems.

·       Social Equity: Rural and marginalized communities remain underserved.

·       Climate Imperatives: Transitioning to renewables is vital for sustainability and resilience.

Last Line of Action

Nigeria stands at a crossroads. With bold reforms, strategic investments, and inclusive policies, the country can transform its electricity sector into a driver of growth and equity. But success will require more than ambition, it demands coordination, capacity-building, and a commitment to long-term vision.

As Abdullahi aptly puts it, “We’re not where we ought to be, but we are somewhere very strategic.”