Hector Igbikiowubo
Lagos — For a nation of more than 230 million people, Nigeria generates less than 5,000 megawatts of electricity. At current levels, that is roughly enough to power a midsize European city. It is not enough to power an industrialising African giant.
This is the paradox at the heart of Nigeria’s economic stagnation: vast energy potential, yet crippling energy poverty. And while President Bola Tinubu promised during the 2023 election campaign to deliver steady electricity and abolish estimated billing, the reality under his watch has been a catalogue of worsening grid failures, rising tariffs, and no visible projects to inspire hope for a better future.
The connection between power and productivity is not abstract. It is the most basic equation of economic development. When power fails, productivity falls. When productivity falls, growth stops. And when growth stops, poverty deepens.
The Numbers Tell a Grim Story
Nigeria’s installed generation capacity stands at approximately 13,625 megawatts, an impressive figure on paper. Yet actual electricity dispatched to the grid averages between 4,500 and 5,500 megawatts. In March 2026, the grid could only wheel a paltry 2,908 megawatts. In practical terms, barely 36 per cent of the country’s generation capacity is actually available to produce power.
Even more troubling, Nigerian power plants are being pushed close to their limits operating at roughly 90 per cent load factor, leaving no room for contingency when breakdowns or peak demand periods strike. This means the system is not just inadequate; it is brittle, poised to fail at the slightest pressure.
And fail it does. In 2024 alone, the national grid collapsed 12 times. In 2025, four more major collapses occurred. Already in 2026, the grid has collapsed twice more, despite the government constituting a committee to find solutions. Between 2015 and 2025, the grid collapsed roughly 105 times.. The economic cost is staggering: the Nigerian Independent System Operator warns that every minute the grid collapses, the economy loses an estimated N1.9 billion. Annually, the country bleeds approximately N40 trillion to power outages.
This is not a power crisis, it is a national economic catastrophe.
The Cost of Unreliable Electricity
When the lights go out, the economy does not pause—it bleeds.
Reliable electricity impacts almost everything: manufacturing, healthcare, education, agriculture, technology, and the cost of everyday living . Bismarck Rewane, Managing Director of Financial Derivatives Company, underscored this urgency recently, describing power as the backbone of economic activity. Without reliable electricity, Nigeria’s economic ambitions will remain difficult to achieve .
Consider the arithmetic of Nigerian business life. Every manufacturer must budget for diesel and petrol to keep generators running. These costs are passed to consumers, making Nigerian goods more expensive than they should be. Artisans and small-scale operators—the engine of the informal economy—see their margins squeezed, unable to pass costs to consumers already burdened by stagnant incomes . Households and businesses spend billions of dollars every year simply to keep the lights on . This is a private-sector tax on productivity, paid daily by every Nigerian who cannot rely on the grid.
The Manufacturers Association of Nigeria (MAN) has raised the alarm that production lines nationwide have been impacted badly, even as members face tariff hikes exceeding 250 per cent . This is not merely an inconvenience—it is a structural barrier to industrialisation and poverty reduction.
The 2023 Promise and Its Unravelling
President Tinubu’s campaign promise to abolish estimated billing was not just a soundbite—it was a recognition of one of the most visible injustices in the sector. Consumers were being charged for electricity they did not receive, while utilities collected revenue without accountability.
Yet under this administration, the situation has worsened. The government introduced a tariff hike in April 2024, tripling rates for Band A customers from as low as N66 to N225 per kilowatt-hour . Despite this, the electricity subsidy burden remains stubbornly high. Between 2024 and mid-2025, the government spent a staggering N2.493 trillion on electricity subsidies, nearly matching the cumulative subsidy from 2018 to 2023 . A tariff increase intended to reduce subsidies has instead merely reshuffled costs while service remains abysmal.
The government points to reforms: the Presidential Power Sector Debt Reduction Programme, the Presidential Metering Initiative, and tariff optimisation. By June 2026, the administration had settled N2.28 trillion in sector arrears, and Nigeria crossed the seven million installed meters mark . A N501 billion bond was issued, oversubscribed, demonstrating investor confidence . Around 45 per cent of the market has transitioned to cost-reflective tariffs .
But these metrics obscure a more troubling reality. The debt resolution, while necessary, addresses the symptoms of a failed system, not its root causes. Metering, while essential, is a tool to improve commercial discipline, not to generate more power. The fundamental challenge remains: the country does not produce enough electricity to meet its needs, and no amount of tariff reform will change that.
Minister of Power Joseph Tegbe, appointed in April 2026, has asked Nigerians to temper expectations, noting that decades of neglect “will not be fully reversed in weeks or months” . He is correct—but his candour raises a painful question: why did it take so long to begin the reversal?
The Productivity Trap
Nigeria’s power crisis creates a vicious cycle. Without reliable electricity, manufacturers cannot produce at capacity. Without production, jobs are not created. Without jobs, incomes stagnate. Without incomes, consumption falls. Without consumption, investment in power infrastructure is not justified. And without investment, power supply remains inadequate.
The Transmission Company of Nigeria insists the grid can wheel 8,700 megawatts—far above the highest ever generated . This suggests transmission is not the primary constraint. The real problem lies in generation: gas supply disruptions, maintenance issues, and plant outages. The Minister of Power has acknowledged that gas shortages affect about 75 per cent of gas-fired plants, with only two of 32 plants operating under firm gas supply contracts . In other words, Nigeria has the infrastructure to generate more electricity but lacks the gas to fuel it—a bitter irony for a country with proven gas reserves exceeding 215 trillion cubic feet .
This is a failure of governance, not engineering. The gas-to-power value chain is crippled by payment disputes, inadequate pipeline infrastructure, and a lack of strategic planning. Private investors have been willing to commit capital, as the oversubscribed bond demonstrates, but they cannot fix a system where the government has failed to enforce contracts, ensure gas supply, or maintain critical infrastructure.
What Must Change
The path forward requires more than half-measures. It demands a fundamental rethinking of Nigeria’s approach to power.
First, the government must declare a national emergency on power and treat it as the existential economic threat it is. This is not hyperbole—it is a recognition that no economy can develop on intermittent electricity.
Second, states must be empowered to generate, transmit, and distribute electricity within their territories, as the Electricity Act 2023 allows . Decentralisation is not a threat to the national grid—it is a complement. Regional power solutions—embedded generation, mini-grids, solar farms—can provide reliable electricity to industrial clusters, universities, and commercial hubs without waiting for the federal grid to stabilise .
Third, the government must aggressively address the gas supply crisis. This means enforcing contracts, expanding pipeline infrastructure, and providing fiscal incentives for gas producers to prioritise the domestic market. The International Energy Agency’s recommendation to end routine gas flaring—a practice that wastes a resource Nigeria desperately needs—should be acted upon with urgency.
Fourth, transmission infrastructure must be modernised and expanded, with investment in battery storage and renewable energy integration. The $1.16 billion invested in grid digitalisation is a start, but it is not enough.
Finally, the government must restore trust with consumers. The promise to abolish estimated billing must be fulfilled through accelerated metering—not just for commercial efficiency, but because it is the right thing to do. When consumers trust the system, they will pay for the service they receive. When they do not, they will resist every tariff increase, no matter how necessary.
A Matter of Survival
The power crisis is not merely an inconvenience. It is a matter of national survival. Without reliable, affordable electricity, Nigeria cannot industrialise, cannot create jobs for its rapidly growing population, and cannot compete in the global economy.
The Tinubu administration has made some progress on the financial front, settling debts and expanding metering. But these are the easy parts—the low-hanging fruit of sector reform. The difficult work generating enough electricity to power an industrialising nation remains undone.
Nigerians have heard promises before. They have seen officials come and go. They know that the gap between promise and delivery in Nigeria’s power sector can stretch for years or never be closed at all.
President Tinubu promised steady power supply and the end of estimated billing. It is time to deliver. The future of Nigeria’s economy—and the well-being of its 230 million people—depends on it.
