NIGERIA AND ACCESS TO ELECTRICITY

 Fitful supply of electricity does so much damage to the economy

For three consecutive years, the World Bank has named Nigeria as the country with most people without access to electricity. In its latest report, ‘Tracking SDG7: The Energy Progress Report 2025,’ the World Bank noted that 86.8 million Nigerians could not access power supply as of 2023. The year before (2022), the country also had the least access with some 86 million people. The latest report assessed progress made in the Sustainable Development Goal 7 (SDG7), which focuses on ensuring access to affordable, reliable, sustainable, and modern energy for all by 2030.

The World Bank latest report has once again highlighted the challenges in the country’s power sector. Nigeria generates barely 14,000 megawatts of electricity for more than 200 million people. The more agonising part is that less than half of the figure is available for distribution in homes and industries. While there were expectations that the unbundling of the Power Holding Company of Nigeria (PHCN) along with its DISCOS (distribution companies) in 2013 would translate into improved and increased power generation and efficient distribution in the country, darkness has continued to reign, even with higher tariffs. Inefficiencies have continued to dominate the sector as the transition to a largely privately owned sector did not bring about the outcomes expected. 

Today, most Nigerians have come to the inescapable conclusion that the process through which a host of emerging economies successfully used to reset their electric power challenge is proving too difficult to be applied effectively on our shores. Consequently, many parts of the country now consider it a luxury to have few hours of electricity supply on any given day. Disruptions of electricity supply occasioned by regular grid collapses and vandalism of equipment are commonplace, causing significant pains and economic losses to Nigerians. In addition, there is inadequate investment in modernising critical infrastructure – from generation to transmission lines. Besides, many of the sector players are owed significant debts, mostly, ironically from government parastatals, which help in crippling operations.  

 The implications of the least access to electricity supply are obvious on the economy. Many Nigerians, both wealthy and poor, have turned to fuel or diesel-powered generators to power their homes and businesses. It is estimated that over 22 million petrol and diesel generators power about 26 per cent of all households and 30 per cent of micro, small and medium enterprises (MSMEs). Indeed, for decades, roaring generators provide the soundtrack to urban and rural life, producing more than twice as much power as Nigerians get from the grid. 

The absence of reliable power supply stifles economic activities and productivity. Annual economic losses from inefficient supply of power are estimated at five to seven per cent of Gross Domestic Product (GDP)—at a cost of US$25 billion. With everybody supplying their own electricity, Nigeria is one of the toughest places in the world to do business.  Lack of electricity has limited access to healthcare, education, and other opportunities. Many small and medium scale businesses have been crippled due to the prohibitive cost of generating their own power. Even the big business ventures, particularly the manufacturing ones, are also constantly reeling from the biting effect of energy poverty with consequences stretching to every part of the economy.  

However, in a historic shift, President Bola Tinubu signed a new electricity act in 2023, aimed essentially at decentralising the power sector. The Act gives states the authority to control and regulate electricity within their domains, granting them the freedom to generate, transmit, and distribute power. It is yet to be seen how this intervention will help in powering homes and industries.