How to revitalise Nigeria’s power sector

BY JUMOKE OLASUNKANMI

Nigeria’s electricity supply is plagued by many issues including inadequate power generation capacity, poor maintenance, and outdated infrastructure, which causes frequent blackouts across the country. According to the Africa Trade Barometer report, these power cuts cost Nigeria’s economy around $26 billion annually, as businesses spend $22 billion annually on fuel for off-grid solutions like generators.

To address the power sector problems, Nigeria must invest in renewable energy solutions, decentralise the national grid, and enhance capacity building through technical training to revitalise the power sector and reduce reliance on off-grid solutions.

In 2024 alone, the national grid collapsed at least 11 times, forcing individuals and businesses to rely on generators. The reliance on generators negatively affects Nigerian industries, aggravates the air quality, and poses a public health safety concern.

The Federal Ministry of Power needs to accelerate investment in renewable energy solutions. Nigeria has a vast potential for renewable energy, with solar, wind, and biogas resources capable of addressing significant portions of the country’s energy needs. A targeted strategy such as tax breaks to attract local and foreign investment in these sectors can alleviate the strain on the national grid while providing clean and reliable alternatives. Policies to reduce the cost of importation of renewable energy equipment will also encourage private sector engagement. Investing in renewable energy has helped countries like Mozambique transition to green energy, generating almost 100 percent of its electricity from renewable energy sources.

The Ministry of Power should collaborate with national and international agencies, such as the Nigerian National Secretariat for Capacity Building and the International Energy Agency, to support the development of technical expertise and adopt global best practices. The ministry should also encourage public-private partnerships with private energy investors and corporations. These partnerships can focus on establishing scholarship schemes and training institutes. In return, the partners can be offered tax cuts and subsidies.

These institutes and scholarship schemes will help train future engineers and technicians, ensuring a steady supply of skilled professionals and addressing the current skill gap. South Africa’s electricity unit demonstrated the effectiveness of specialised institutes by establishing the Eskom Academy of Learning. Eskom provides specialised training in power engineering and contributes to developing a skilled workforce for the country’s energy industry.

Decentralising the national grid is an important step towards regional power autonomy. It would reduce the burden on the national grid. While the country has amended its constitution to allow states to generate, transmit, and distribute their own electricity, only a few states plan to explore this option. However, regional power autonomy encourages states to leverage local resources to generate power and tailor energy solutions to local demand.

States in the country’s riverine areas, including Rivers, Benue, Osun, and Bayelsa, can capitalize on their water resources for hydropower generation. Northern states such as Yobe and Kano,  can harness solar energy to meet their needs. Decentralising the national grid like the Kenyan government did when it launched the Kenya Off-grid Solar Access Project will increase energy access in remote communities. Decentralisation will reduce Nigeria’s reliance on the national grid and provide reliable, sustainable energy to all regions.

Nigeria stands at a crossroads. The persistent electricity crisis threatens not only economic growth but also the aspirations of millions of Nigerians. It is time to invest in renewable energy, strengthen local capacity, and empower states to drive power production. Nigeria’s future depends on a reliable and sustainable energy sector.

Jumoke Olasunkanmi is a writing fellow at African Liberty.