Nigeria loses N40trn yearly to power outages

Nigeria loses an estimated N40tn every year due to weak and unreliable electricity supply, the Nigerian Independent System Operator (NISO) has revealed.

The agency warned that persistent outages remain one of the biggest barriers to economic growth, industrial productivity, and job creation.

In its latest industry report, NISO said millions of businesses and households incur huge costs generating their own electricity because of the country’s unstable supply. It stated that power shortages drain about $29bn annually from the economy, an amount that translates to roughly N40.1tn at the prevailing exchange rate of N1,385 per dollar.

“Power outages cost Nigeria an estimated $29bn annually. Businesses, manufacturers, and households spend billions each year generating their own electricity,” the report said, adding that reliable power is crucial for growth and productivity.

Despite the massive demand for electricity, NISO disclosed that Nigeria produces far more power than the national grid can deliver.

According to the agency, daily electricity generation stands between 45,000MW and 50,000MW, yet only 5,000MW—about 10 per cent—reaches the grid.

It blamed the shortfall on long-standing structural challenges including limited transmission capacity, weak distribution networks, and inconsistent gas supply.

“The gap reflects constraints across the value chain,” the operator said.

NISO outlined its core responsibilities, which include enforcing the national grid code, enhancing system reliability, improving transparency, and strengthening coordination across the sector.

The agency stressed that a stable grid is vital for Nigeria’s economic future.

Board Chairman Adesegun Akin-Olugbade underscored the urgency of reforms, saying: “Electricity is a 19th-century technology, and we do not need rocket scientists to fix these problems.”

The report listed digitalisation, infrastructure upgrades, grid code enforcement, and diversification of Nigeria’s energy mix as key steps needed to stabilise the power system.

NISO also highlighted achievements recorded since its establishment, including the commissioning of 82 new power transformers between 2024 and 2025, which added over 8,500MVA capacity.

More than 30 transmission projects were completed, raising the grid’s wheeling capacity to about 8,700MW.

The agency pointed to operational milestones such as the 5,802MW peak generation recorded in March 2025, a record 129,370MWh daily energy delivery, and 421 consecutive days without grid collapse between 2022 and 2023.

It added that grid digitalisation is progressing under the SCADA/EMS programme, with $1.16bn invested, over 3,000km of fibre optic lines deployed, and more than 100 substations now equipped with SCADA systems. The project is currently at 69 per cent completion.

Despite these improvements, electricity supply remains severely constrained. Power generation has recently dipped below 4,000MW, forcing distribution companies to ration supply.

As of March 25, 2026, TCN data showed that only 2,908MW was allocated to the 11 DisCos.

With widespread outages continuing nationwide, DisCos have repeatedly apologised to consumers, attributing the shortages to low generation caused by gas constraints.

The Minister of Power, Adebayo Adelabu, also apologised earlier in the week and assured Nigerians that supply would stabilise soon.

Adelabu said gas supply issues had affected 75 per cent of Nigeria’s gas-powered plants, explaining that global gas shortages, domestic payment backlogs, and pipeline repairs have all contributed to the drop in output.

He noted that only two of Nigeria’s 32 power plants have firm gas supply contracts, while the remainder operate with irregular deliveries.