About 62 per cent of Nigeria’s installed electricity generation capacity remains idle, with only 4,854 megawatts of an installed 13,625MW currently available on average, the Federal Government has disclosed.
The Minister of Power, Joseph Tegbe, disclosed this in a presentation titled ‘Industrialisation and Regional Competitiveness: The Role of Power’ at a Nigeria Economic Summit Group event in Lagos.
The presentation, delivered by his Special Adviser, Martins Olajide, showed that the country’s available electricity supply remains significantly below estimated realistic peak demand of about 20,000MW.
According to the minister, the disparity between installed and available generation capacity remains one of the major challenges confronting Nigeria’s electricity sector, with businesses and households bearing the consequences of inadequate supply.
“4,500 to 5,000MW average available for 200m+ people. 26 grid collapses in 2024. Energy is 30 to 40 per cent of factory cost,” Tegbe stated.
The minister said the Federal Government was targeting more than 80 per cent electricity access within five years while working to close the gap between installed and available generation capacity within three years.
The government is also targeting a reduction in Aggregate Technical, Commercial and Collection losses to below 16.92 per cent within three years, in line with the target set by the Nigerian Electricity Regulatory Commission.
Tegbe said strengthening critical transmission corridors would form part of efforts to improve the reliability of electricity supply, particularly along the Lagos, Enugu-Port Harcourt and Abuja-Kaduna-Kano routes.
He said the government was also expanding metering, developing human capacity in the sector and establishing captive economic clusters where power supply could be linked directly to industrial activities.
“The plan is in motion: transmission corridors through Lagos, Enugu–Port Harcourt and Abuja–Kaduna–Kano are being strengthened, seven million meters are rolling out, training of 5,000 recently commenced, and captive economic clusters are linking power directly to industry,” he said.
The government plans to establish a more independent electricity market with reduced government intervention, while addressing liquidity challenges, accumulated debts and technical and commercial losses across the electricity value chain.
The reforms, according to the ministry, are aimed at creating a commercially sustainable electricity market capable of attracting investment into generation, transmission and distribution.
Tegbe said reliable electricity remained central to President Bola Tinubu’s ambition of transforming Nigeria into a $1 trillion economy, particularly as the country seeks to strengthen its industrial base.
“President Bola Tinubu has been absolutely clear about the economic direction of this administration – to transform Nigeria into a one trillion-dollar economy – and electricity sits at the heart of that ambition,” he said.
The persistent gap between available generation and demand has forced manufacturers and other businesses to rely heavily on diesel generators and other forms of self-generation, adding significantly to production costs.
The ministry said Nigerians spent N16.5 trillion on self-generation in 2023, compared with about N1 trillion in grid revenue.
The World Bank has also estimated that unreliable electricity supply costs the Nigerian economy about $25 billion annually, representing between five and seven per cent of the country’s Gross Domestic Product.
Meanwhile, the Manufacturers Association of Nigeria said inadequate energy supply remains the biggest constraint affecting manufacturers.
Speaking during a panel session at the summit, the Director of the Research and Economic Policy Division of MAN, Dr Oluwasegun Osidipe, said inadequate energy supply topped the 10 major constraints identified by manufacturers in the association’s Q2 2026 Manufacturers’ CEO Confidence Index.
“In the Q2 2026 Manufacturers’ CEO Confidence Index Report by MAN, manufacturers highlighted 10 top constraints limiting their operations. According to that report, the first on the list was inadequate energy supply,” Osidipe said.
He said manufacturers had been forced to invest heavily in alternative power facilities because of unreliable grid electricity, creating additional costs alongside their electricity bills.
“Manufacturers have suddenly, apart from setting up their own production units, they have also set up power-generating facilities,” he said.
Osidipe said the additional energy burden was undermining the ability of Nigerian manufacturers to compete, while regulatory bottlenecks, exchange-rate pressures and dependence on imported machinery and raw materials were compounding the problem.
The government said closing the generation-capacity gap, strengthening transmission infrastructure, expanding electricity access and improving the commercial viability of the power market would help reduce production costs and strengthen the competitiveness of Nigerian industries.
It said the measures were also intended to position Nigerian manufacturers to take greater advantage of the African Continental Free Trade Area market, estimated at 1.4 billion consumers.
