FG targets 80% electricity access within five years

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The Federal Government has pledged to raise electricity access above 80 per cent within five years and close the gap between installed and available power generation within three years as part of measures to address the energy crisis undermining Nigeria’s manufacturing sector.

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The commitment was disclosed by the Minister of Power, Joseph Tegbe, during a presentation on ‘Industrialisation and Regional Competitiveness: The Role of Power’ at the just-concluded Nigeria Economic Summit Group event in Lagos.

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The minister also pledged to align with the Nigerian Electricity Regulatory Commission’s target of reducing Aggregate Technical, Commercial and Collection losses to below 16.92 per cent within three years.

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In his presentation, delivered at the event by his Special Adviser, Martins Olajide, the minister said the Federal Government’s plan would strengthen key transmission corridors, including Lagos, Enugu-Port Harcourt, and Abuja-Kaduna-Kano, while expanding electricity access and improving the reliability of power supplied to businesses and households.

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“Over 80 per cent access, ATC&C losses below 17 per cent, the capacity gap closed – Nigerian industry gets the reliable, affordable power it needs to compete for AfCFTA’s 1.4 billion consumers,” he stated.

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He said the reforms aligned with President Bola Tinubu’s ambition to transform Nigeria into a $1tn economy, noting that electricity remained central to achieving the target.

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“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.

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Tegbe added that the administration had begun strengthening transmission infrastructure across the Lagos, Enugu-Port Harcourt and Abuja-Kaduna-Kano corridors, while rolling out seven million meters and training 5,000 people.

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“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.

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He said the government also planned to establish an independent electricity market free from government intervention, improve liquidity and sustainability in the sector, and reduce recurring debts and losses.

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The ministry identified the electricity deficit as a major constraint to industrialisation, noting that Nigeria currently has 13,625 megawatts of installed grid capacity but only 4,854MW of average daily availability.

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It said about 62 per cent of installed capacity remained idle, while realistic peak demand stood at about 20,000MW. It said the country’s inadequate electricity supply had forced businesses to rely heavily on self-generation, imposing a huge cost on manufacturers.

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“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,” the power minister stated.

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The presentation stated that Nigerians spent N16.5tn on self-generation in 2023, compared with about N1tn in grid revenue, while the World Bank estimated that unreliable electricity caused an annual economic loss of $25bn, equivalent to between five and seven per cent of the country’s Gross Domestic Product.

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The ministry said improved grid stability, the creation of economic clusters and expansion of the transmission network along major economic corridors would unlock industrial productivity and investment.

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It also said the reforms would support competitiveness by providing industries with more reliable and affordable electricity.

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Speaking on a panel at the event, the Director, Research and Economic Policy Division, Manufacturers Association of Nigeria, Dr Oluwasegun Osidipe, said inadequate energy supply remained the biggest constraint identified by manufacturers in the Q2 2026 Manufacturers’ CEO Confidence Index.

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“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,” he said.

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Osidipe said manufacturers had invested heavily in alternative power generation because of unreliable grid supply, adding that the cost had further weakened their competitiveness.

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“Manufacturers have suddenly, apart from setting up their own production units, they have also set up power-generating facilities. And when you look at the cost of maintaining that facility, for example, manufacturers in 2035 spent about N1.35tn on alternative energy sources,” he said.

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He said the expenditure was separate from the electricity bills manufacturers paid for grid power, making it difficult for Nigerian firms to compete effectively. “And that is excluding the bills they’ve paid for energy supply from the grid. So how do you expect such a manufacturing concern to be competitive?” Osidipe said.

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The MAN research director identified regulatory bottlenecks as another major challenge, saying manufacturers faced multiple agencies, overlapping requirements and additional administrative charges.

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“The second issue is regulatory tyranny. You have a situation where you have multiple regulations, and the time that CEOs and staff should focus on core manufacturing is used to attend to regulatory agencies,” he said.

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Osidipe also cited the exchange rate, manufacturers’ dependence on imported machinery, spare parts and strategic raw materials, as well as weak coordination between monetary and fiscal policies as major constraints.

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“The fourth one is the weak handshake between the monetary and fiscal policy. You see the government coming up with one monetary policy and on the other hand, the fiscal authority is also using a contradictory policy,” he stressed.

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He added, “You might agree with me that the manufacturing sector cannot be competitive in an environment where the government is using its right hand to counter what the left hand is extending to the industry.”

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