Energy stakeholders have raised concerns over Nigeria’s inability to significantly improve electricity supply despite its vast installed generation capacity and abundant natural gas reserves, warning that weak investment in conventional power infrastructure and continued dependence on oil revenues could undermine long-term economic growth.

This comes as global clean energy investment is projected to reach $2.2 trillion this year, creating new competition for capital and reinforcing the need for countries like Nigeria to diversify their economies.

The concerns were raised on Monday in Abuja during the National Dialogue on Energy Transition organised by the Natural Resource Governance Institute (NRGI) in partnership with the National Council on Climate Change (NCCC), The Nextier Group and The Electricity Hub.

The discussions came as the NRGI unveiled two reports examining Nigeria’s electricity future and opportunities for economic diversification amid the accelerating global shift towards cleaner energy.

According to the reports, Nigeria currently generates an average of only 4,475 megawatts of electricity despite a 13,625MW installed generation capacity, leaving about 86 million people without access to electricity.

While investment in Nigeria’s clean energy sector has increased tenfold over the past five years, no new capital has flowed into gas-fired power generation, raising concerns over the country’s ability to rely solely on gas to bridge its electricity gap.

The reports identified persistent constraints, including inadequate gas supply, weak transmission infrastructure, poor payment discipline across the electricity value chain and limited financing for new generation projects.

The findings underscore a broader challenge confronting Nigeria’s energy sector. Although the country possesses Africa’s largest proven gas reserves of more than 200 trillion cubic feet, abundant natural resources have yet to translate into a reliable electricity supply capable of supporting industrialisation and economic expansion.

The widening gap between installed and available generation also reflects longstanding operational bottlenecks, including ageing infrastructure, gas shortages, transmission constraints and liquidity problems that continue to limit power delivery to consumers.

Beyond electricity, the stakeholders noted that Nigeria faces mounting pressure to reduce its dependence on oil revenues as global investment increasingly shifts towards renewable energy, critical minerals and low-carbon technologies.

Speaking at the event, Director-General of the National Council on Climate Change, Omotenioye Majekodunmi, represented by the Director of Energy, Transportation and Infrastructure, Michael Ivenso, said Nigeria’s transition pathway must align with its unique development priorities.

She rejected the notion that climate action and economic growth were mutually exclusive, describing the transition as one of the country’s defining economic conversations.

“For Nigeria, energy transition is one of the defining economic conversations of our generation. Too often, the conversation is framed as a choice between climate action and economic growth. But that is a false choice,” she said.

The NRGI Nigeria Country Manager, Tengi George-Ikoli, said the reports highlighted both significant challenges and substantial opportunities for the country.

She said policymakers should avoid treating the transition as a competition between gas and renewable energy but instead pursue evidence-based decisions that strengthen energy security through a diversified energy mix.

George-Ikoli noted that while Nigeria possesses considerable natural resources, sustainable development would ultimately depend on governance, institutional capacity and effective implementation rather than resource abundance alone.

She observed that attracting investment, strengthening transparency, improving infrastructure and ensuring that natural resource wealth benefits citizens remain the country’s biggest governance challenges.

Her remarks reflected one of the central conclusions of the new reports: that successful diversification will depend less on discovering new resources than on improving the management of existing resources.

The report on gas-to-power ambitions noted that gas-fired electricity, while remaining important, is unlikely to achieve universal electricity access on its own given persistent financing and infrastructure constraints.

Instead, it recommended a pragmatic strategy that combines gas with rapidly expanding distributed renewable energy systems, such as mini-grids and solar installations, which have attracted increasing private investment in recent years.

Speaking during the dialogue, Nextier Partner Emeka Okpukpara argued that Nigeria should increasingly view renewable energy as an economic development opportunity rather than solely an environmental obligation.

He noted that with more than 85 million Nigerians lacking electricity, expanding energy access should be viewed as a pathway to industrialisation, job creation and inclusive growth.

Okpukpara said Nigeria possesses over 200 gigawatts of solar potential and about 14GW of hydropower resources—far exceeding the country’s current grid capacity of roughly 5GW.

According to him, distributed renewable energy offers a faster route to expanding electricity access than relying exclusively on conventional grid expansion, particularly given rising transmission costs, fuel price volatility and persistent market losses.

Stakeholders at the event also highlighted Nigeria’s growing minerals sector as another opportunity for diversification, cautioning, however, that mining alone cannot replace oil revenues in the short to medium term.

They argued that unlocking the sector’s potential would require improved geological data, stronger regulatory certainty, enhanced security, better governance of artisanal mining and coordinated infrastructure development.

The dialogue noted that Nigeria’s long-term competitiveness would depend on balancing energy security, affordability and sustainability while attracting investment across multiple energy technologies.