General
Agusto Seeks Improvement in Nigeria’s Electric Power Production
By Adedapo Adesanya
Research and credit ratings firm, Agusto & Co. has identified strategies for more improvement in the country’s electric power production.
In a research note shared with Business Post, the agency noted that Nigeria’s electric power consumption per capita of 145KwH falls behind those of select peers, South Africa (4,198) and Ghana (351KwH), as well as the average for lower middle-income countries of 811KwH.
“Following the unbundling and subsequent privatization of the long-standing government-owned monopoly in the power sector, as part of the power sector reform of 2004, honest and objective evaluations of the Nigerian Electricity Supply Industry’s (‘NESI’) performance in the post-power privatization era have ranged from ‘minimal improvement’ to ‘more of the same’. The entire NESI value chain is fraught with structural impediments, which have continued to impede optimal performance, with operators consistently ‘passing the buck’,” Agusto noted.
Nigeria, according to the World Bank, has the largest energy access deficit in 2021, with 43 per cent (or 85 million Nigerians) of the country’s population without access to grid-connected electricity.
“As of 31 December 2022, the generating segment of the market comprised 29 operational generating plants with a combined installed capacity of 13,014MW and an average operational capacity of 4,523MW – down 29 per cent from 6,371.9MW in 2019.
“There were 12 Independent Power Plants (IPPs) in Nigeria in 2022, accounting for 31.2 per cent of the country’s total power generating capacity, a 300 basis points decline from 2021 – due largely to gas constraints and faulty machinery.”
Agusto & Co. pointed out that on average, and due largely to gas constraints, only five IPPs: Azura-Edo (26 per cent), Odukpani (19 per cent), Okpai (16 per cent), Afam VI (15 per cent), and Rivers IPP (8 per cent) jointly accounted for circa 84 per cent of the power generated from the 12 IPPs in the last four years.
Agusto also explained that lingering gas shortages are proving to be difficult for Africa’s largest economy.
“Gas constraints remain prevalent despite the fact that Nigeria has the world’s ninth-largest proven gas reserves, estimated at 204 trillion cubic feet in 2022. The domestic gas market in Nigeria has been plagued by chronic underinvestment in generating and distribution infrastructure.
“At the same time, under the domestic supply obligation framework within the Gas Master Plan (GMP), all gas companies are required to supply an assigned quota of gas to critical sectors (including electric power) at prices ($2.18mscf) lower than what is obtainable in international markets (average of $7.52mscf in the US market in 2022).”
As a result, “operators of thermal plants struggle to secure viable gas contracts at the approved price. As at the end of 2022, 25 of the country’s 29 GenCos were gas-powered, underscoring the urgency of finding a long-term solution to gas supply constraints,” the note explained.
The firm noted that the weakest link in the NESI value chain is the Transmission Company of Nigeria (TCN), which is still entirely government-owned.
“The national grid has a wheeling capacity of circa 8,100MW, which pales in comparison to the nation’s peak electricity demand of 19,798 MW. This implication is that even with an increase in the generating capacity of the grid-connected IPPs, the TCN is unable to evacuate more than 8,100MW.”
Agusto & Co. noted that the TCN is a critical bottleneck in the supply of electricity and has stalled investment in power generation.
“On the other hand, the TCN continues to blame load rejection by distribution companies, particularly during the rainy season, for the high frequency of grid collapses.”
Agusto & Co. anticipates that the current Nigerian Electricity Grid Maintenance Expansion and Rehabilitation Program (NEGMERP), which aims to expand the country’s grid network through the diligent execution of network expansion projects funded by both the Federal Government and donors, will result in some growth in NESI in the short term.
This is in addition to the Presidential Power Initiative signed with Siemens AG, which is expected to result in an additional 25,000MW of operational capacity from the national grid.
“The completion of such projects will assure prospective power generation companies that the TCN has ample capacity to receive generated electricity. With a more efficient TCN, Nigeria can achieve self-sufficiency in power supply, making electricity exports easier through the West African Power Pool’s (WAPP) future Regional Electricity Market (REM).”
Agusto lauded President Muhammadu Buhari’s signing of the Fifth Alteration Bill No. 33, 2022 (the “Electricity Constitutional Amendment”), which allows Nigeria’s 36 States to generate, transmit, and distribute electricity in areas covered by the national grid.
“This has significant implications for the country’s struggling power sector, as it could lead to increased investment in power generation and distribution infrastructure, as well as increased competition among power providers.
“By devolving power to the States, Agusto & Co. believes the bill could also lead to more efficient and effective management of the power sector, as states will have greater control over their power supply. This could lead to more targeted investment in power infrastructure and more responsive management of power supply and demand.”
This is without some limitation as, “the bill also raises concerns about the potential for fragmentation of the power sector, as different states may have different priorities and approaches to power generation and distribution, leading some, to possibly bypass the national grid entirely.
“Furthermore, States deemed to lack a sufficient economic base may be unable to attract investors in their electricity generation, transmission, or distribution, causing them to fall behind other States in terms of electricity supply. This could constrain the business environments in these States, thereby eroding investor confidence, discouraging investment, and limiting economic growth and development.”
Giving its outlook, the firm noted that the NESI is currently in the second stage – the transitional electricity market (TEM) – on its evolutionary path, where the state-owned special purpose vehicle (the Nigerian Bulk Electricity Trading Plc – ‘NBET’) buys electricity in bulk from the generating companies and independent power producers (IPPs) and resells to the distribution companies (DisCos) under vesting contracts.
As it transitions to the medium-term market, Agusto & Co. expects more IPPs to become operational, which will significantly raise the Industry’s generation capacity over the medium term.
By Adedapo Adesanya
President Bola Tinubu is expected to be among the leading public figures attending the next edition of the Africa CEO Forum, which will take place on May 14-15, 2026, in Kigali, Rwanda
A strong Nigerian private-sector delegation will also take part, including Mr Aliko Dangote, Mr Wale Tinubu, Mr Ofovwe Aig-Imoukhuede, Mrs Adesuwa Ladoja, Mrs Rachel More-Oshodi, Mrs Zouera Youssoufou, Mr Karim Noujaim, Mr Dany Abboud, Mr Ayo Otuyalo and Mr Chukwuerika Achum. Nigeria’s Coordinating Minister of Health and Social Welfare, Professor Muhammad Ali Pate, will also be present.
According to a statement on Tuesday, the 2026 edition will convene in Kigali to address a defining question for Africa’s future: how to achieve the scale necessary to compete, integrate and thrive in a fragmenting world.
It comes as global power dynamics continue to evolve, while the ability of Africa to rely on competitive, agile and internationally integrated corporate champions has become a defining corporate imperative. In this shifting global landscape, one lesson is clear: scale is no longer optional. It is the first line of defence.
Organised by Jeune Afrique Media Group and co-hosted by the International Finance Corporation (IFC), the Africa CEO Forum 2026 will convene Africa’s leading public and private decision-makers around a clear conviction: scale can only be achieved through shared African ownership.
The Forum will explore three strategic levers to build continental scale. First is shared equity, which will look to unlock cross-border equity investment to create multinational African champions. Mobilise African institutional capital across markets to strengthen resilience and enhance long-term returns.
Also, is shared infrastructure, which will take on designing complementary infrastructure to integrate African value chains. Champion transformative projects that serve regional, not merely national, needs and create truly connected markets.
Thirdly is shared frameworks, which is set to harmonise standards, rules and regulations to boost investor confidence and enable the free flow of capital, goods and services. Build future-proof digital rails for health, education, agriculture and cross-border payments.
Speaking on this, Mr Amir Ben Yahmed, President of the Africa CEO Forum, stated: “If Africa wants to compete in a world defined by scale, it must move beyond economic patriotism and embrace a new model: African capital investing together. Shared ownership, cross-border partnerships and continental ambition will define the economic future of Africa and the next generation of African champions.”
On his part, Mr Makhtar Diop, Managing Director at IFC, stated: “Africa has the capital and the opportunity to grow and create quality jobs. What matters now is putting that capital to work at scale. That means building trust, sharing risk, and investing across borders. The Africa CEO Forum brings leaders together to connect policy and private investment, and to help shape Africa’s next phase of growth.”
By Adedapo Adesanya
The Minister of Marine and Blue Economy, Mr Adegboyega Oyetola, has directed the Nigerian Shippers’ Council (NSC) to investigate the allegations of systemic efforts to undermine local barge operators at the nation’s seaports.
The Minister issued the directive during the recent 2026 First Quarter Citizens/Stakeholders’ Engagement, Sectoral Performance Review, and Ministerial Management Retreat of the Federal Ministry of Marine and Blue Economy, held in Lagos.
During the engagement, representatives of barge operators alleged that there was a coordinated and deliberate attempt by certain foreign interests to edge them out of business.
According to the Special Adviser to the Minister, Mr Bolaji Akinola, they claimed that these actions, if left unchecked, could significantly weaken local capacity and disrupt the balance of competition within Nigeria’s maritime logistics chain.
The operators expressed concern that policies, operational bottlenecks, and preferential treatment allegedly being accorded to some foreign-linked entities by certain terminal operators were creating an uneven playing field.
According to them, these challenges are gradually eroding their market share and threatening the survival of indigenous businesses.
Responding to the concerns, the minister emphasised the federal government’s commitment to protecting local investments and ensuring fair competition within the maritime industry.
He directed the council, as the port economic regulator, to carry out a thorough and impartial investigation into the claims.
Mr Oyetola stressed that any form of anti-competitive behaviour or policy inconsistency that disadvantages Nigerian businesses would not be tolerated.
The minister also reiterated the importance of stakeholder engagement as a platform for identifying sectoral challenges and shaping responsive policy interventions, stressing that the government remains focused on strengthening the marine and blue economy sector as a driver of national growth, job creation, and sustainable development.
By Modupe Gbadeyanka
The presidential candidate of the Labour Party (LP) in the 2023 general elections, Mr Peter Obi, has asked to know the real beneficiaries of the repeated payments made by the federal government to settle outstanding debts in the power sector.
Over the weekend, President Bola Tinubu approved the payment of N3.3 trillion for the “full and final” payment for debts in the electricity sector.
The action, according to a statement issued by the Special Adviser to the President on Information and Strategy, Mr Bayo Onanuga, was to ensure improvement in electricity supply in the country.
In a post on Tuesday, the former Governor of Anambra State questioned why the government is allegedly making the same payment it announced almost two years ago.
“On May 17, 2024, N3.3 trillion was approved for the same purpose. On July 25, 2024, another N4 trillion bond was approved to settle similar debts. There have also been other approvals in between, all targeted at addressing the same power sector liabilities.
“This raises a fundamental question: were the previous approvals mere announcements without execution?” he queried.
“During the 2023 campaign, President Bola Tinubu made a clear promise: that if he failed to deliver stable electricity, Nigerians should not re-elect him.
“Today, the reality is that power supply has worsened to the extent that there are even discussions about disconnecting the Presidential Villa from the national grid.
“Each time legitimate concerns are raised, what we see appears more like policy pronouncements than measurable progress.
“Now, again, we are confronted with another N3.3 trillion approval to settle power sector debts,” Mr Obi further said.
The chieftain of the African Democratic Congress (ADC) said, “These debts were largely accumulated under successive administrations of the All Progressives Congress between 2015 and 2025. This raises serious concerns about accountability, transparency, and effectiveness in public financial management.”
“It is important to note that government institutions and agencies, including the Presidential Villa, owe a significant portion of these debts. Year after year, budgets were made and funds appropriated. Why then were these obligations not settled when due? And from what source will this new payment be made? Are we resorting once more to borrowing to service inefficiencies?
“Key questions remain unanswered: How did the debt accrue? What is the actual total debt in the power sector? Which components of the debts are due to operators’ inefficiency and should be borne by them? Why have previous approvals not translated into tangible improvements? Who are the real beneficiaries of these repeated payments?
“Is the N3.3 trillion approved on April 6, 2026, the same as the N3.3 trillion approved in May 2024, and how does it relate to the N4 trillion bond approved in July 2024?
“Nigeria must move beyond recycled announcements and confront the power sector crisis with sincerity, transparency, and decisive reforms.
“Until we do so, we will remain trapped in a cycle of debt and darkness.
But with discipline, accountability, and the right leadership, a new Nigeria is still possible,” he wrote.
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