NIGERIA is losing an estimated N40 trillion annually due to persistent electricity shortages, the Nigerian Independent System Operator (NISO) has warned, describing unreliable power supply as one of the biggest obstacles to economic growth, industrial productivity, and job creation in the country.
News Point Nigeria reports that the alarming figure, equivalent to about $29 billion yearly, underscores the heavy toll that power outages continue to impose on businesses, manufacturers, and households across Nigeria.
According to NISO, the losses stem largely from the cost of self-generation, as millions of Nigerians and businesses rely on generators due to unreliable grid supply.
“Reliable electricity is one of Nigeria’s most important economic priorities. Power outages cost Nigeria an estimated $29bn annually. Businesses, manufacturers, and households spend billions each year generating their own electricity,” the agency said in its latest industry report.
At the prevailing exchange rate of about N1,385 to the dollar, the losses translate to roughly N40.1 trillion annually.
Despite the huge demand for electricity, the system operator revealed a significant gap between the amount of power generated and what is actually delivered to consumers.
Nigeria reportedly generates between 45,000 and 50,000 megawatts of electricity daily, but only about 5,000 megawatts roughly 10 per cent reaches the national grid.
“The gap reflects constraints across the value chain, including transmission capacity limitations, distribution network constraints, and gas supply disruption,” the organisation explained.
NISO identified multiple structural challenges responsible for the inefficiencies in the power sector, including weak transmission infrastructure, limited distribution capacity, and inconsistent gas supply.
These challenges have significantly restricted the ability of the grid to wheel electricity to end-users, leaving much of the generated power underutilised.
The agency stressed that closing this gap is critical to unlocking Nigeria’s economic potential.
“A stable national grid unlocks economic growth, industrial productivity, and job creation,” it said.
To address the crisis, NISO outlined several key reforms, including enforcing grid code compliance, strengthening system dispatch, and improving transparency and accountability across the sector.
It also recommended digitalising the grid, expanding infrastructure, and diversifying Nigeria’s energy mix as part of long-term solutions.
The agency highlighted ongoing progress, noting that 82 new power transformers were commissioned between 2024 and 2025, adding over 8,500MVA in capacity, while more than 30 transmission projects were completed.
The national grid’s wheeling capacity has also improved to about 8,700MW.
Despite the challenges, NISO said the power sector has recorded notable milestones in recent years.
These include a peak generation of 5,802MW in March 2025, a record daily energy delivery of 129,370MWh, and a 421-day period without grid collapse between 2022 and 2023.
“These milestones demonstrate the potential of the system when operating conditions align,” the agency noted.
The system operator also pointed to progress in grid digitalisation through the SCADA/EMS programme, backed by a $1.16 billion investment.
Over 3,000 kilometres of fibre optic infrastructure have been deployed, and more than 100 substations have been equipped with modern monitoring systems.
The project is currently about 69 per cent complete and is expected to improve real-time monitoring, decision-making, and overall grid stability.
Meanwhile, electricity supply across Nigeria has worsened in recent months, largely due to gas shortages affecting power generation.
Data from the Transmission Company of Nigeria (TCN) showed that only 2,908MW was allocated to the country’s 11 distribution companies as of March 25, 2026 far below national demand.
Power generation has consistently dropped below 4,000MW, further limiting supply to homes and businesses.
Distribution companies have repeatedly apologised to customers, attributing outages to reduced generation caused by gas supply constraints.
The Minister of Power, Adebayo Adelabu, recently apologised to Nigerians over the worsening blackouts, assuring that efforts were underway to stabilise supply.
He explained that about 75 per cent of Nigeria’s gas-fired plants are affected by supply challenges.
“Even the best turbines cannot operate without raw materials,” Adelabu said, citing global gas shortages, local supply issues, unpaid obligations, and pipeline repairs as contributing factors.
According to him, only two out of Nigeria’s 32 power plants currently have firm gas supply contracts, while others depend on irregular supplies.
As the crisis deepens, NISO emphasised the urgency of comprehensive reforms, warning that Nigeria’s economic future depends heavily on a stable and efficient electricity system.
With trillions of naira lost annually and millions affected by unreliable power, stakeholders say decisive action is needed to bridge the gap between electricity generation and delivery.