Nigeria’s Electricity Paradox and the Unanswered Question of 2026

Electricity is Nigeria’s most expensive public failure, draining trillions from the economy each year while dimming productivity, trust, and growth. Against the backdrop of the government’s promise to deliver adequate power in 2026, the critical issue is no longer the promise of stable power but the unanswered question of how it will be offered, writes Festus Akanbi

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lectricity is the most basic infrastructure of modern life. It is scarcely noticed when it works and impossible to ignore when it fails. In Nigeria, failure has become so routine that darkness itself has been normalised. This normalisation now collides with repeated political assurances that a stable power supply is imminent. The gap between promise and performance is no longer rhetorical; it is visible in lost output, fiscal leakages, and daily hardship.

A night flight into Lagos offers a stark summary. Instead of the continuous glow typical of coastal megacities, the city appears as a scatter of dim orange lights, each powered by a private generator. What appears to be illumination is actually fragmentation. Every generator is a substitute for failed public infrastructure, and together they form one of the most expensive electricity systems in the world.

Financial Cost

The financial burden is staggering. In 2023 alone, Nigerians spent an estimated N16 trillion on petrol and diesel for self-generation. This covers only fuel and excludes generator purchases, maintenance, inverters, and opportunity costs. The World Bank estimates that unreliable electricity costs Nigeria about $29 billion annually, roughly 2 per cent of GDP. These losses exceed federal spending on health and education combined. Electricity, which should quietly enable growth, instead constrains it.

Behind the aggregates lies widespread microeconomic damage. Factories halt production mid-shift when power fails, raising unit costs and disrupting supply chains. Hospitals rely on diesel to keep equipment running. Cold storage failures compromise food and pharmaceuticals. Students study under torchlight. Small businesses divert capital from growth to fuel. These daily disruptions accumulate into structural economic underperformance.

The Paradox of Plenty

Nigeria’s crisis is not rooted in a lack of energy resources. Installed generation capacity stands at about 13,000 megawatts. Yet peak delivery to the grid in 2025 rarely exceeded 5,500 megawatts, with average daily supply closer to 4,000 megawatts, roughly what a single large global city consumes off-peak. The gap reflects overlapping failures: inadequate gas supply, weak transmission, poor plant availability, and chronic grid instability.

The grid itself remains fragile. Repeated system collapses in 2024 and 2025 triggered nationwide blackouts. These events erode investor confidence and push consumers toward self-generation. As more users exit the grid in practice, revenues decline, leaving the system short of funds for maintenance and expansion. A vicious cycle takes hold.

Losses within the value chain deepen the problem. A significant share of generated power never becomes revenue. Transmission losses are substantial, but distribution losses—technical and commercial—are worse. Fewer than 55 per cent of customers are metered, leaving most on estimated billing. In such conditions, payment discipline weakens. For every N10 worth of electricity delivered, only a fraction is fully recovered; the rest is lost to losses, theft, disputes, and political interference.

Rising Revenue, Failing Service

Paradoxically, revenues continue to rise. Distribution companies collected about N570 billion in the third quarter of 2025, largely due to tariff increases rather than better supply. The disconnect between higher bills and persistent outages has intensified public frustration. Price adjustments without reliability gains erode trust and undermine reform credibility.

Nigeria’s power challenges are longstanding. Since 1999, successive governments have announced emergency plans and megawatt targets. The most significant reform was the 2013 privatisation of generation and distribution assets, meant to inject private capital and efficiency. But the reform was incomplete. Distribution assets were allocated to undercapitalised operators, transmission remained state-controlled and underfunded, gas pricing remained misaligned, and metering obligations were weakly enforced. Fragmentation replaced coordination.

The consequences are clear. Generation companies face liquidity crises from delayed payments. Gas suppliers demand cash or divert supply to export markets. Banks hold non-performing power-sector loans. Government interventions plug gaps but do not fix cash-flow weaknesses. Circular debt becomes the system’s defining feature.

Lessons from Elsewhere

Nigeria’s predicament is not inevitable. Morocco built the Noor Ouarzazate solar complex, supplying power to over 1 million households. Egypt added about 14,000 megawatts of gas-fired capacity in six years by aligning fuel pricing with incentives and honouring guarantees. Ghana, after its 2012–2016 crisis, restored stability through transparent procurement, contract discipline, and insulation of technical decisions from politics. Today, Ghana enjoys a largely uninterrupted supply and exports surplus power.

The common thread is governance consistency, not technological superiority. Nigeria’s challenge lies less in diagnosis than in execution across political cycles.

The 2026 Promise

Against this backdrop, the assurance by Power Minister Adebayo Adelabu that Nigeria will achieve stable electricity by 2026 carries weight. It raises a critical question: what institutional, financial, and operational mechanisms will deliver stability within this timeframe? Stable systems emerge from cumulative gains in generation, fuel supply, transmission reliability, distribution efficiency, and payment discipline, all of which remain weak.

The absence of a publicly articulated, time-bound roadmap detailing how these constraints will be addressed simultaneously fuels concern. Gas pricing disputes persist. Transmission bottlenecks remain. Distribution companies are undercapitalised. Metering gaps are wide. Grid collapses continue. Without clarity on sequencing, financing, and enforcement, the promise risks joining a long list of unmet targets.

This question is sharpened by President Bola Ahmed Tinubu’s 2023 pledge that Nigerians should not vote for him again if he failed to stabilise power supply. Framed as a performance benchmark, it set a clear expectation. Two weeks into 2026, the indicators of “stability”, reduced outages, sustained megawatt delivery, improved payment recovery, and declining generator use, remain largely absent.

Scrutiny intensified after President Tinubu attended the 2026 Abu Dhabi Sustainability Week, a major energy forum. The absence of Nigeria’s Power Minister from the delegation drew attention not as protocol, but because energy diplomacy and domestic reform are intertwined. In a sector driven by investor confidence, perception matters as much as policy.

From Promise to Performance

Electricity reform is ultimately a test of governance credibility. The costs of failure are already quantified: trillions of naira in annual losses, weakened competitiveness, constrained industrialisation, and lower living standards. What remains unclear is how political commitments will translate into measurable outcomes within a defined period.

Nigeria does not need a miracle to fix its power sector. It needs disciplined execution of known reforms, credible contract enforcement, and the courage to endure short-term political discomfort for long-term survival. Until the path from promise to performance is clearly mapped and consistently followed, Nigerians will continue to rely on private generators as substitutes for public power, and the question of how to achieve stable electricity by 2026 will remain unanswered.