Nigeria Loses N40tn Yearly to Power Crisis, System Operator Warns

Nigeria’s struggling electricity sector is costing the economy an estimated N40 trillion annually, according to the Nigerian Independent System Operator (NISO), which says persistent power outages remain one of the biggest barriers to economic growth and industrial development.

In its latest industry report, the government-backed operator disclosed that unreliable electricity supply translates to about $29 billion in yearly losses, driven largely by the high cost of self-generation by businesses and households across the country.

The warning comes amid worsening blackouts nationwide, with many Nigerians relying on generators and alternative energy sources to power homes and businesses. Analysts say the situation has continued to erode productivity, increase operational costs and discourage investment.

NISO noted that while Nigeria generates between 45,000 and 50,000 megawatts of electricity daily, only about 5,000 megawatts is transmitted through the national grid—a gap attributed to systemic bottlenecks across the power value chain.

“The constraints span transmission limitations, weak distribution networks and disruptions in gas supply,” the report stated.

The country’s electricity crisis has persisted for decades, despite reforms including the privatisation of the sector in 2013. However, inadequate infrastructure and poor coordination between generation, transmission and distribution segments have continued to undermine performance.

Recent data from the Transmission Company of Nigeria shows that power generation has dropped below 4,000 megawatts, with only about 2,900 megawatts allocated to distribution companies as of March 2026.

Minister of Power, Adebayo Adelabu, attributed the current outages to gas supply challenges affecting most power plants, noting that only a fraction of facilities have reliable fuel contracts.

Energy experts, including Professor Dayo Ayoade of the University of Lagos, have blamed poor governance and corruption for the sector’s inefficiencies, warning that the economy will continue to suffer without urgent reforms.

NISO emphasised that stabilising the national grid could unlock significant economic gains, boost industrial productivity and create jobs.

The agency recommended measures such as grid digitalisation, infrastructure upgrades and diversification of energy sources to address the crisis and bridge the gap between power generation and delivery.

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