Government targets more than 80 per cent electricity access within five years and plans to close the generation capacity gap within three

The Federal Government has unveiled an ambitious plan to raise Nigeria power access above 80 per cent within five years and close the gap between installed and available generation capacity within three years, as it seeks to ease one of the biggest constraints facing manufacturers and businesses.

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Minister of Power Joseph Tegbe disclosed the targets during a presentation on industrialisation and regional competitiveness at the Nigeria Economic Summit Group forum in Lagos, where he outlined measures aimed at improving electricity reliability, reducing sector losses and strengthening the manufacturing base.

Tegbe also committed the government to supporting the Nigerian Electricity Regulatory Commission’s target of reducing Aggregate Technical, Commercial and Collection losses to below 16.92 per cent within three years.

“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,” the minister said.

The targets form part of the administration’s wider economic ambition to transform Nigeria into a $1 trillion economy, with Tegbe describing dependable electricity as fundamental to achieving that objective.

“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.

The minister said work was already under way to strengthen major transmission corridors, including Lagos, Enugu-Port Harcourt and Abuja-Kaduna-Kano, while seven million electricity meters are being rolled out and training has commenced for 5,000 people.

“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,” Tegbe said.

The government also plans to develop a more independent electricity market, improve liquidity and strengthen the financial sustainability of the sector while tackling recurring debts and operational losses.

The urgency is underscored by the wide gap between Nigeria’s installed electricity capacity and the amount actually available to consumers.

The ministry said Nigeria has 13,625MW of installed grid capacity but only about 4,854MW of average daily availability.

With realistic peak demand estimated at approximately 20,000MW, about 62 per cent of installed capacity is effectively unavailable.

The ministry described the situation as a major obstacle to industrial growth, noting that businesses have increasingly turned to expensive alternative sources of electricity to keep operating.

“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,” Tegbe said.

The economic cost of unreliable electricity is equally substantial.

According to the presentation, 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 costs Nigeria about $25 billion annually, equivalent to between five and seven per cent of GDP.

The Federal Government believes that stabilising the grid, expanding transmission infrastructure and creating economic clusters where industries can access more dependable power will help unlock investment and productivity.

For manufacturers, however, the electricity challenge is only one part of a wider competitiveness problem.

Speaking during a panel discussion, Director of the Research and Economic Policy Division of the Manufacturers Association of Nigeria, Dr Oluwasegun Osidipe, said inadequate energy supply topped the list of constraints identified by manufacturers in MAN’s Q2 2026 Manufacturers’ CEO Confidence Index.

“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,” Osidipe said.

He said manufacturers had invested heavily in their own power-generation facilities because of unreliable grid electricity, adding that the additional expenditure had undermined their ability to compete.

Osidipe cited spending of about N1.35 trillion on alternative energy sources by manufacturers, although the statement as provided contains a reference to “manufacturers in 2035”, which appears inconsistent with the 2026 context.

“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?” he asked.

Beyond electricity, Osidipe identified regulatory bottlenecks as another major burden on businesses, arguing that manufacturers often have to deal with multiple agencies, overlapping requirements and additional administrative costs.

“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.

Exchange-rate pressures, dependence on imported machinery and raw materials, and inadequate coordination between monetary and fiscal policies were also identified as significant obstacles.

Osidipe said conflicting policy directions could make it difficult for manufacturers to plan, invest and compete effectively.

“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,” he said.

The Federal Government’s electricity plan therefore comes at a critical moment for Nigerian industry.

Closing the gap between installed and available generation will require improvements not only in generation, but also across transmission, distribution, metering, payment systems and sector liquidity.

If the targets are achieved, the impact could extend beyond households receiving more reliable electricity.

For manufacturers, lower dependence on diesel and other forms of self-generation could reduce production costs, improve competitiveness and create greater room for investment.

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For now, the scale of the proposed reforms represents a significant test of the government’s ability to translate Nigeria’s substantial installed generation capacity into electricity that businesses and households can actually use.