Get Guardian on GoogleNigeria requires at least 100,000 megawatts of electricity to attain higher-middle-income economic status, former Minister of Power, Prof. Barth Nnaji, has said, warning that the country’s current supply capacity is grossly inadequate to support industrial growth and business expansion.
Nnaji, Chairman of Geometric Power Group, said although Nigeria had the capacity to generate about 13,000 megawatts, only between 4,000 and 5,000 megawatts was available on the national grid, largely due to transmission constraints.
He spoke at the Lagos Country Club Business Forum 3.0 in Lagos, themed “Energy Costs and Business Survival: Driving Profitability Amid Nigeria’s Power Crisis”.
Nnaji blamed the sector’s challenges partly on the 2013 privatisation of the defunct Power Holding Company of Nigeria (PHCN), arguing that the pursuit of immediate profits undermined long-term investment.
He said electricity investments required substantial capital and patience, with some taking between seven and 10 years to break even. Citing the Association of Power Generation Companies of Nigeria, he disclosed that sector loans and debts had exceeded N7 trillion.
He also identified inadequate gas supply and the absence of cost-reflective tariffs as major constraints, urging government to choose between allowing electricity prices to reflect supply costs and providing adequate subsidies.
Nnaji estimated that subsidising electricity by N50 per kilowatt-hour for 5,000 megawatts would cost government about N180 billion monthly or N2.16 trillion annually.
Citing the Aba Integrated Power Project as an example, he said reliable electricity at affordable, cost-reflective rates could improve industrial productivity and business performance.
Also speaking, immediate past President of the Manufacturers Association of Nigeria, Otunba Francis Meshioye, disclosed that businesses spent over N1.34 trillion on alternative power generation in 2025.
He said energy costs consumed up to 60 per cent of operating profits in some businesses, leaving fewer resources for expansion, staff welfare and productivity.
Meshioye urged government to address structural weaknesses in the electricity sector while advising businesses to improve energy efficiency and explore cheaper power alternatives.
Guest speaker, Dr Benson Uwheru, described the additional burden of unreliable electricity as an “Invisible Energy Tax on Nigerian Enterprise”, citing lost production hours, equipment damage, product spoilage, job losses and missed investment opportunities.
In her presentation, Vice President, Upstream, Women in Energy Network, Engineer IfeomaUkabiala, urged businesses to reduce dependence on diesel generators and adopt alternative energy sources suited to their operations.
She said diesel-generated electricity could cost about N600 per kilowatt-hour, compared with N90 to N150 for solar power with battery storage, depending on the system.
President, Lagos Country Club, Seyi Adewunmi, called for coordinated efforts to improve electricity generation, transmission and distribution. He said the Electricity Act 2023 offered opportunities for state governments and private investors to participate in the power market.
