The Federal Government has announced plans to increase electricity access in Nigeria to more than 80 per cent within the next five years as part of efforts to tackle the country’s energy crisis and boost industrial production.
The Minister of Power, Joseph Tegbe, disclosed the plan during a presentation titled “Industrialisation and Regional Competitiveness: The Role of Power” at a Nigeria Economic Summit Group event in Lagos.
The government also aims to close the gap between Nigeria’s installed electricity generation capacity and the amount of power actually available within three years.
Tegbe said the government would work with the Nigerian Electricity Regulatory Commission’s target of reducing Aggregate Technical, Commercial and Collection (ATC&C) losses to below 16.92 per cent within the same period.
According to the minister, strengthening the country’s electricity infrastructure is essential to making Nigerian businesses more competitive, particularly as the country seeks to take advantage of the African Continental Free Trade Area market.
The government plans to strengthen major transmission corridors, including Lagos, Enugu-Port Harcourt and Abuja-Kaduna-Kano, while expanding electricity access to homes and businesses.
Tegbe said the government was also rolling out seven million electricity meters and had commenced the training of 5,000 people as part of its broader electricity-sector reforms.
He said the administration’s electricity plans were closely linked to President Bola Tinubu’s ambition of transforming Nigeria into a $1 trillion economy.
“Electricity sits at the heart of that ambition,” the minister said.
The Ministry of Power said Nigeria currently has about 13,625 megawatts of installed grid capacity, but only around 4,854MW is available on average each day.
This means a significant portion of the country’s installed capacity is not being utilised, while realistic peak electricity demand is estimated at about 20,000MW.
The electricity shortage has forced many Nigerian businesses, particularly manufacturers, to depend heavily on diesel and other alternative sources of power.
The ministry estimated that Nigerians spent about N16.5 trillion on self-generation in 2023, compared with approximately N1 trillion in grid revenue.
The World Bank has also estimated that unreliable electricity supply costs Nigeria about $25 billion annually, equivalent to roughly five to seven per cent of the country’s Gross Domestic Product.
Manufacturers struggle with high energy costs
The Manufacturers Association of Nigeria said inadequate electricity supply remains one of the biggest challenges facing manufacturers.
Speaking at the event, the association’s Director of Research and Economic Policy Division, Dr Oluwasegun Osidipe, said inadequate energy supply was ranked as the leading constraint in the Q2 2026 Manufacturers’ CEO Confidence Index.
He said manufacturers had been forced to invest heavily in their own electricity-generation facilities because of unreliable grid power.
According to Osidipe, the cost of operating alternative power systems adds significantly to the cost of manufacturing in Nigeria and makes local companies less competitive.
He also identified regulatory bottlenecks, exchange-rate pressures, dependence on imported machinery and raw materials, and poor coordination between monetary and fiscal policies as major problems affecting the manufacturing sector.
The Federal Government says its planned electricity reforms will focus on improving grid stability, expanding transmission infrastructure, reducing losses and creating economic clusters where industries can access more reliable power.
The government also plans to establish a more independent electricity market with less direct government intervention while addressing liquidity problems, accumulated debts and losses within the sector.
If successfully implemented, the government expects the reforms to improve electricity reliability, reduce businesses’ dependence on expensive self-generation and strengthen Nigeria’s industrial competitiveness
