Powering Industrialisation in South-east: Case For Regional Energy Strategy

OUTSIDE THE BOX BY Alex Otti

I would like to begin by expressing my profound gratitude to everyone involved in the conception, planning and the smooth take-off of the South East Vision 2050 Regional Stakeholders’ Forum (SEV2050) for the brilliance of their efforts and the diligence in execution. Special commendations are due to the Federal Government for spearheading this timely and bold intervention through the Office of the Vice President, the Federal Ministry of Regional Development and the South East Development Commission. May I take a moment to appreciate in a special way, Vice President Kashim Shettima, for his resolute dedication to this project and for honouring us with his esteemed presence at this epoch-making event. I am also wont to acknowledge the generous commitments of my colleagues in the South East Governors’ Forum to the success of this grand initiative which had been put together to bring relevant stakeholders to the table as we collectively set a new 50-year development trajectory for our region. It is fulfilling to observe that this project has secured the buy-in of major players in the public and private sectors in the zone; I am also impressed that community and religious leaders, centres of learning and development partners are getting involved in the development conversations that efforts like this have engendered. This event, by the quality of debates and interests it has raised over the last few weeks, is already a success and the reason is simple: the SEV2050 has awoken a new consciousness amongst the different social and economic players in the region. Expectedly, the conversation has rightly shifted from the mundane to the sublime; it is no longer about the glory of individual states and communities but the destiny of the collective. It is interesting to see that after a long run of missed opportunities, we are now turning our attention to the untapped potential that abound in the region and how we can begin to leverage the immense human and material resources across the land to create oceans of opportunities for our people.

Naturally, we are an itinerant population. You will find our people all over the world doing great things, adding value to systems that embrace their ingenuity. The truth, however, is that we do not travel round the world for the fun of it; we are driven by the promise of new opportunities, the thrill of beating the odds and the fulfilment that comes from going the whole distance to win. What we hope to achieve with this event and the engagements to follow is to create new streams of opportunities in the region for our army of young graduates, thinkers and innovators, skilled technicians and the thousands of young people who troop out of this land every day in search of meaning. From where I stand, this programme is connected to the evolution of contemporary economic layouts on account of its orientation but there is more. We have gathered to establish a pattern of engagement that would henceforth drive investment decisions by public and private sector economic agents. The aspiration is to return us to the trajectory set by the vision of our fathers like Dr. M. I. Okpara and others who had the foresight to build structures and systems that have survived the passage of time and the evolution of technology. The emphasis will not just be on the theories and dialectics of development but on the pathway that would see us commit a certain share of our resources as governments and businesses to initiatives that improve the stock of our human capital and the physical infrastructural layouts to carry the weight of our dreams.

I have been given the responsibility to address this august gathering on the subject of industrialisation and the case for a regional energy strategy. Permit me, distinguished ladies and gentlemen, to express my sincere gratitude to the Managing Director of the South East Development Commission, Honourable Mark Okoye, for pointing me to a conversation we had on the grand subject of development through industrialisation sometime last year when the board and management team of the Commission had an interface with our people in Abia. As many in this beautiful auditorium may know, I have written extensively on the interconnectedness of energy, industrialisation and accelerated economic development in my role as an editorial board member and columnist with Thisday Newspapers, guest speaker at multiple events and resource person to institutions and agencies. As the Governor of Abia State since May 29, 2023, I have also tried to keep faith with my philosophy that genuine development begins with extensive layout of infrastructure, especially road and public power supply systems, human capital development and then industrialisation to create jobs, expand the output of goods and services and activate dormant economic assets. While it is true that we are only just beginning; it still has to be noted that we have since established that the private sector will always go in the direction set for it by the public sector through patterns of investments and policy commitments.

Abia, and Aba in particular, has seen the resurgence of hundreds of businesses that were hitherto moribund; entrepreneurs who left the city several years ago are returning and the real estate market is booming as individuals, households and businesses struggle to reacquire property they once sold off in frustration for a pittance. What have we done differently in the last two and half years? Again, it would be simplistic to reduce our answer to just investments in road infrastructure or urban renewal which are obvious and true but the more profound way to look at it is to say that the government rebuilt private sector confidence by creating an enterprise-friendly environment and governance. It may also interest us to note that the leading private sector player in Abia and by extension, the whole of the South east region, is a power infrastructure company called Geometric Power Limited Aba. It took 20 years of hard work and hundreds of million of dollars to deliver. We thank the Vice President who was in Abia exactly a year ago to commission the project. Today, not only is the Aba ring-fenced area independent and unaffected by whatever happens within the national grid, the entire district sees more reliable and predictable power supply than most other places. The assurance of steady power supply, far above the national average, the freedom to move without the limitations of bad roads and other subsets of new infrastructure advantage have helped in resuscitating Aba’s industrial tradition with the extensive social and economic benefits that come with it — particularly job creation and the building of an expanded entrepreneurial base.

Power is the foundation of industrial growth and the modern Aba is proof that investments and higher enterprise outputs are functions of steady and predictable power supply. Agreed that it is expensive to generate and distribute electricity for domestic and industrial applications; the high cost, in the final analysis is nothing compared to what the whole of society pays for the metaphorical and actual darkness that are guaranteed in the absence of reliable supply. Over the years, the argument amongst experts on the Nigerian energy conundrum has centred mostly around the subject of insufficient capital injection but when you tabulate how much has been committed to the sector in the last 26 years by different administrations and compare the outlay to the results, you will agree with me that the challenge goes beyond money. Yes, one may blame official corruption but as I have often pointed out, wrong diagnosis arising from simplistic assumptions can only lead us to a false conclusion. Corruption is a major obstacle to our development aspiration but the real challenge oftentimes are behaviours and cultural tendencies many of us are either not prepared to see or perhaps understate the harm they inflict on the system. Talk about incompetence for example — what can be more harmful to a system than having a body of incompetent decision-makers driving institutional processes? How about the absence of political will to make the right call? The challenge here is not dissimilar to the setbacks in other national development frontlines but why the energy sector is critical is the simple reason that so much rests on it. At any rate, if we manage to get the energy outlook and pathway to sustainability right, multiple layers of opportunities would come alive, jobs will be created in tens of millions and ultimately, the appetite to travel round the world for economic expression and fulfilment will be moderated by the emergence of new opportunities here.

I would like to on this note, appreciate the Federal Government for the bold reforms that are taking place in the energy sector following the liberalisation of the electricity market through the Nigerian Electricity Act of 2023. Many may struggle to recognise it but the opening of the market for participation by states and private sector entities is a major step forward in the march to long term social and economic development. Conversations around regional energy strategy can only happen because of the provisions of the new electricity framework. I am also impressed that before now, many states and private sector players in the region have spotted the opportunities in the energy sector and have rightly activated investment vehicles to earn a first-mover advantage. It is also noteworthy that we are looking beyond the conventional energy sources. I am particularly delighted that investors are actively tapping into the renewable energy ecosystem to meet the power needs of our population and industries.

In September last year, the Abia State mini-grid regulatory framework was signed into law to expand access to electricity for our people through a mix of conventional and new energy solutions. The overarching goal is to harness every resource at our disposal to extend the marvel of electricity to communities that are either poorly served or under-served. The framework protects investors and shields energy consumers from exploitation. Also last year, we acquired the distribution assets of Interstate Electric that are domiciled in Abia, outside the Aba ring-fenced corridor. The motivation for the acquisition is clear: we are determined to take our energy destiny in our own hands. Critical to our pursuit of a robust electricity market in Abia is the setting up of the Abia State Electricity Regulatory Authority, ASERA. Last December, ASERA took over regulatory responsibilities for the electricity market in the State from the National Electricity Regulatory Commission, NERC. Effectively, the Abia State Government is functionally involved in every layer of the electricity value chain in the State and our focus is on the long term. While we work on building stability in the short to medium term through investments in the broad spectrum of energy infrastructure, development of industry-relevant skill-set and incubation of strong institutions to drive system-wide sustainability; the long term target is to set the stage for competent private sector entities to move in and drive the generation, transmission and distribution layers of the industry while the government restricts itself to regulatory activities. As I earlier hinted, however, the private sector will predictably rely on the government to do the heavy lifting through critical social investments and confidence building efforts. The private sector players, when the coast is sufficiently clear, can then step in to provide multiple layers of services and make decent profits. Nevertheless, I have to quickly sound the alarm bell that the market requires long term players, not those with their eyes on short term profits.

Coming now to the region with its vast array of resources and the potential to attain energy sufficiency in the medium to long term, my recommendation would be the development of a broad energy industry strategy anchored on 3 connected approaches namely: resource identification and optimisation, sustained investments in critical energy infrastructure and adoption of the right market outlook. At the centre of this model should be value creation, customer satisfaction and fair deal for every stakeholder group. The first leg of the framework which deals with resource identification and optimisation encapsulates layers of processes that are critical to the identification, documentation, mapping and activation of all sources and channels of conventional and renewable energy domiciled in the region. This phase will form the foundation for building a robust regional energy solutions strategy because not much can be achieved in the push for industrial-scale energy sufficiency unless we develop a strategic pathway for identifying the true strength of the region with respect to energy resources and size. At the moment, we know that Imo State holds about the largest reserve of natural gas in West Africa with experts estimating the size to be in the trillions of cubic feet, (Tcf). In Abia, Imo and Anambra, you find significant crude oil deposits and here in Enugu and in nearby Ebonyi State, large untapped deposits of coal exist. We also know that this region has extensive capacity for industrial energy production using solar vehicles, hydropower resources and biomass. It has also been established that significant but untapped natural gas deposits exist in the Ukwa West LGA of Abia State, especially around Owaza where the Abia Industrial Innovation Park (AIIP) is located. Evidently, we have enough resources to drive a comprehensive energy plan with a view to achieving optimal industrial output. At any rate, we also know that potential and reality are often worlds apart. It then follows that if the power-resource potential of the region is to be fully harnessed, a deliberate plan must be put in place to make that happen. As I had earlier hinted, not much shall be achieved by just talking about these prospects because talk, as they say, is cheap. What will help us instead is to undertake the building of a regional energy framework that prioritises the development of an accurate resource dossier which shall then be used as the foundation for holistic energy policy development and implementation. Other frontlines of interconnected needs include technology acquisition, human resource development, partnerships, especially with the federal government agencies and international investment groups.

These subsets of commitments within the energy resources identification and optimisation outlook are not complex but would require serious level of diligence and sincerity on the part of the participating stakeholders to yield results. More fundamentally, an understanding of the entire value chain by the relevant actors would be necessary to guarantee project sustainability as nothing should be left to chance. This is where the role of the private sector would be most prominent with respect to capital inflows, competence-based recruitment and focus on driving stakeholder value across the entire spectrum. It may be difficult to make an accurate prediction but I am optimistic that if we play it right, the region could successfully generate and distribute between 10,000-15,000 MW of electricity over the next decade.

Some people would not agree that coal is a viable energy source in view of the rising appetite for cleaner alternatives. I appreciate the sentiments but we would do well to also note that across the dominant industrial nations including China, USA, India, Japan and Indonesia, coal still constitutes a major element of their electricity supply mix. While I agree that we need to look beyond complex hydrocarbon sources for our energy supply demands, I am also of the view that we have to start by making the most of what is available to us to address urgent survival needs before adopting aggressive energy transition programmes. As I stated in a 2024 lecture at the University of Buckingham, Africa’s share of the total value of global emission still stands at less than 5%. If therefore, we have coal in abundant supply in our region, would it then be fair for us to remain in darkness, our industries dormant and the population hungry when the resources that can power our industrial growth are buried right under our feet?

Besides, if the developed countries of the world are still firing their coal plants to meet industrial energy demands, would it not be reasonable for us to also develop our coal deposit to meet the development aspirations of our people? Again, while it is OK to join the global energy transition crusade, we must never lose sight of our development reality as a people. In the final analysis, nothing, in my estimation, should be taken off the table in the push for industrial energy sufficiency for our region, so long as there are no ethical or legal restrictions.

Although I brought in elements of investments in the last section, I would like to talk about the importance of continuous investments in the energy sector with respect to infrastructure expansion and restoration, technology deployment and upgrades and all other layers of support required to keep the system in continuous operation across the frontlines of generation, transmission and distribution. From power plants to overhead lines and towers, cables and transformers, to substations, feeders and electricity meters, extensive financial commitments are required to initiate, expand and sustain energy distribution systems across and within communities for domestic and industrial uses. The amount of funds required to change the energy landscape in the region will certainly not come from a single source. While my preferred model is to have government step in to de-risk the entire outlay by providing institutional guarantees as we have done in the Umuahia ring-fenced zone, it is, however, important to add that as soon as system stability is assured, the government must quickly divest and let forward-looking investors move in and run the venture as a going concern. The prospect of orderly transition would boost the confidence of prospective investors and then create a community-wide awareness that electricity is a service that costs money to produce. This cost must then be borne by the end-users who are expected to pay market-determined rates that take cognisance of the production cost, expected shareholder returns and the average consumer willingness-to-pay. Agreed that long-term investments would be driven in the main by the potential and actual profit prospect per unit of outlay, it is, however, obligatory that I re-emphasise my earlier position that the sector is not one for those with an eye on quick returns. What is, however, guaranteed is that under a stable regulatory and effective governance framework as we are now proposing, those who invest would not only reap good returns in the long run, the value of their assets over time, would more than compensate for the initial commitments. This is therefore a formal invitation to individuals and businesses with the resources to consider investing in the multiple value chains in the energy ecosystem for reasons of the extensive social and economic benefits.

The last leg of the tripod speaks to the adoption of the right market strategy for the energy sector. Again, elements of pricing had been hinted earlier because it would be impossible to discuss investments without building a credible business case with profit projection outlook. For the energy sector, the return on investments would come mostly from revenue earned from service-delivery and long-term appreciation of assets value. Earlier, we spoke about willingness-to-pay, measured as the upper limit of a consumer’s estimation of the total value of utility. This may involve a lot of calculations but for a robust industrial-scope energy sector framework, efforts must be made to get things right with pricing, bearing in mind that consumers are cost-conscious and would always make informed decisions based on their expected value vis-à-vis the size of their pockets. It may not be a great thing to say, but the general assessment is that there are not too many financially-strong people around in terms of purchasing power. It then follows that without painstakingly taking note of the dominant economic realities of the average consumer, businesses operating in the energy ecosystem may price themselves out of the market. In the same vein, if an investor cannot recover the marginal to average production cost in the medium to long term, the likely response would be to pull out and find alternative channels of making money. In the end, the most realistic path to stakeholder satisfaction is finding the right balance between the temptation to make the highest possible profit by the investor and the appetite of the consumer to enjoy free electricity. Arriving at a fair pricing model would require the diligence of the regulatory authorities, the adoption of the long-term view by the investors and a new orientation amongst consumers that electricity is a service that has to be paid for, not a free gift of nature. It would also require the assurances of value creation on the part of the investors because many would rather disconnect than pay for poor services. This is where the need for metering services and infrastructure comes into play. The energy ecosystem framework should provide for compulsory metering paid for by the service providers. The general idea of “estimated billing” is not only exploitative, it negates the principles of fair business practices because it mandates users to pay for services they likely did not receive. The provision of transparent and hard-to-manipulate electricity meters would encourage the service providers to improve system-wide performance as well as guide the attitude of energy users in ways that engenders responsible use.

There are a few more things I would like to say as I conclude. The first is to acknowledge that this event is coming at the right time and I am impressed that every relevant sector has been factored into the debate on what should be our priority as a people over the next 50 years. As I said in my lecture last week at the National Defence College in Abuja, the only way to drive institutional success in the new age of complex changes and fluid dynamics is to tie long term expectations with everyday execution. What this demands is strategic leadership and no less is required in driving the energy systems strategy for the south east region. The next point of interest for me is to express sincere satisfaction with the development-orientation of the south east leaders. I understand that my assessment may be biased considering that I am involved but that is the common verdict of several observers who are not governors nor close to the corridors of power. Every state in the region, without exception, is witnessing great transformation in its infrastructural and social services landscape. As a body of leaders, the Governors’ Forum in the region has united strongly against insecurity and you can see the impact in the peace and tranquillity witnessed across several communities during the last yuletide celebrations. My promise from this podium is that we shall continue to prioritise collaboration over competition because this is our land and the only rational thing to do is to bring development to our people, nothing more, nothing less! Lastly, I would like to assure us that proposals made here shall be considered painstakingly because of the interconnectedness of the critical development nodes. Power is connected to industrialisation as we have exhaustively explained but it is also connected to education, health, security and all other frontlines of our lives in the age of technology and new consumer orientation. The expectation is that we shall make it a priority as leaders to see that the jinx of poor electricity supply is finally broken in the region. In Abia, we have already made arrangements to buy and wheel to Umuahia, whatever output is generated by Geometrics in Aba, beyond what can be consumed in Aba. I also hold the view that there are multiple opportunities for collaboration, cooperation and resource sharing whence we get on with a regional energy masterplan. For instance, instead of spending another 20 years to build another power plant, additional turbines can easily be installed in Geometric to expand their capacity and easily wheel power from Aba to other sates in the region. The truth is that we may not all run at the same pace but it is important to remind ourselves that we are better together and as the ancients said, we go farther when we go together. It also has to be noted that there is no better way to set our people free from the limitations of poverty, unemployment and economic desperation than by building an energy systems framework that is enterprise-focused in outlook, service-driven in operations and resilient to shock in structure. Nature has done its part by endowing us with the resources to bring forth light, our long-term survival, beyond the push to run off to far flung corners of the world in search of opportunities, is to create our own opportunities right here.

•Being the text of an address presented by Governor Otti, OFR, at the South-east Vision 2050 regional stakeholders’ forum at the International Conference Centre in Enugu on February 4, 2026