The president of the African Development Bank Group (AfDB), Akinwumi Adesina, has emphasized the severity of the financial consequences that unstable Electricity Power Supply poses to Nigeria. Citing an International Monetary Fund (IMF) report, he pointed out that Nigeria loses over $29 billion annually as a result of an unreliable power supply. This amount indicates a 5.8% decline in the GDP (gross domestic product) of the country. He revealed this during a lecture presentation titled “Building a Global Nigeria” in honor of retired general Yakubu Gowon’s 90th birthday in Abuja.
He maintained that the high cost and erratic supply of energy posed the biggest threat to Nigeria’s Manufacturing sector. The head of the AfDB stated that industrial expenses have become high and uncompetitive due to load shedding and irregular power supply. He claims that the majority of manufacturing enterprises in Nigeria generate their own energy, relying heavily on heavy fuel and diesel generators. Adesina stated that ₦93.1 billion was spent in the industry on Alternative Energy in 2018, according to the Manufacturers Association of Nigeria (MAN).
Businesses are severely harmed by power outages.
Adesina bemoaned the fact that, in modern Nigeria, no business can function properly without using generators. According to him, the government has to take notice of this circumstance in order to strengthen the nation’s economy. Nigeria has around 12,500 megawatts (MW) of installed capacity overall as of late, but due to system malfunctions, transmission bottlenecks, and problems with gas supply, less than 4,000 MW of that capacity is consistently accessible for distribution. Due to this, businesses are severely harmed by power outages, with firms reportedly investing a lot of money on alternative energy sources like generators.
Electricity power supply issues are encountered around 85 percent of the time in Nigeria, affecting a number of industries and sectors including mining, industrial, and agriculture. It is estimated that the average daily power supply is only four hours, and periods of several days without electricity are expected. As a result, there is a general dependence on private generators, with 96% of the energy used by industry generated off-grid. Lack of maintenance, insufficient transmission infrastructure, and Security concerns are just a few of the problems given a rise to such situations.
Problems with maintenance, old system limits the power plants.
Current Power Generation capacity of 4,000–5,000 megawatts for a population of over 200 million people in the county, is considered a very low amount. The county’s power plants are capable of producing more energy, but problems with maintenance, an old system, and disruptions in the gas supply limit their ability to do so. Numerous plants operate below capacity, which makes blackouts more frequent. The grid is said to have failed many times in a matter of months in 2023 alone, resulting in extensive power disruptions across the nation. This indicates a wide gap in Infrastructure upgrades.
In 2024, the national power grid has also collapsed many times with the most recent one being on October 19, making it third time within 7 days after collapses recorded on October 14 and 15. Previous collapses were witnessed in February, March, April, July, and August. These persistent collapses have led to extensive blackouts that have impacted homes, businesses, and industries all throughout the country. Despite the Transmission Company of Nigeria’s (TCN) best attempts to put in place digital monitoring systems to identify and stop such failures the issue still exists, underscoring the vulnerability of the national grid.
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Resolving the country’s energy issue is key to its industrialization and economic development. For a dependable supply, Nigeria must generate around 40,000 MW, and for a continuous supply across the country, 88,000 MW must be generated. In an interview, the managing director of TCN gave an assurance that Nigerians will have access to a 24-hour power supply in less than five years, citing the projects being carried out by the current minister of electricity. However, ongoing governmental commitment, policy reforms, and Private Sector involvement are necessary for the successful implementation of these efforts.