Nigeria’s power woes stem from system failures, not resource shortage –Experts
Global attention, yesterday, focused on Nigeria’s power sector, with experts stressing that the country’s electricity crisis stems from systemic failures, not energy shortages.
The experts spoke at the CeraWeek in Houston,Texas on the topic: Continental Opportunity: Scaling Energy Access in Africa’s Resource-Rich Economies.
They emphasised that Nigeria’s enduring electricity crisis was not the result of resource scarcity but a stark failure of planning, coordination and execution across the energy system.
Silvia Macri, Associate Director, Africa and Middle East Power and Renewables Lead at S&P Global Energy, said the country’s vast natural gas reserves have not translated into reliable power due to deep structural inefficiencies across the energy value chain.
Nigeria, she noted, has a reliable installed capacity of about seven gigawatts, a level considered grossly inadequate for its large and rapidly growing population.
“The issue is not just about how much resource the country has, but whether the entire system, from production to delivery, is functioning efficiently,” she said.
Macri identified critical gaps spanning gas supply, infrastructure, and electricity delivery as the root causes of the crisis.
Key among them, according to her are: Limited gas pipeline infrastructure, restricting supply to power plants weak transmission and distribution networks which hinders delivery to consumers.
Others are: Underinvestment in generation capacity which leaves demand unmet.
She stressed that solving Nigeria’s electricity problem requires a holistic approach rather than isolated interventions.
“It’s about connecting all parts of the chain, upstream, midstream and downstream and ensuring they are all adequately developed,” she added.
The session also highlighted financial and policy-related constraints that continue to deter investment in Nigeria’s power sector.
Also speaking, Director, Upstream Solutions, S&P Global Energy, Laura Sima, noted that infrastructure projects, particularly pipelines and grid systems, often yield low returns, making them unattractive to private investors.
“Infrastructure is essential, but not necessarily profitable. That raises the question of who should finance it,” the expert said, pointing to government as a critical player in bridging the gap.
In addition,she pointed out that concerns over payment reliability remain a major obstacle. “Gas suppliers are often not paid consistently, undermining confidence and discouraging further investment,”.
The Director, Upstream Solutions and Technical Research, Upstream Intelligence, Africa, S&P Global Commodity Insights, Justin Cochrane, further pointed to currency volatility as a significant barrier.
He explained that investors face losses when revenues earned in naira depreciate against the U.S. dollar, a common scenario in Nigeria’s macroeconomic environment.
“You invest in dollars and get paid back in a weakening local currency. That’s a serious challenge for investors,” he said.
Despite Nigeria’s abundant gas reserves, estimated at over 200 trillion cubic feet, much of the resource remains untapped due to infrastructure and market limitations.
The experts noted that across Africa, only a fraction of discovered gas resources is currently in production, with many projects stalled by lack of infrastructure and viable commercial frameworks.
Macri also highlighted the growing role of renewable energy in addressing short-term supply gaps. Renewables, she said, are quicker and cheaper to deploy, particularly for off-grid and decentralized solutions.
However, she emphasised that gas-fired power remains essential for ensuring stability and supporting intermittent renewable sources.
Beyond Nigeria, panelists observed that Africa is becoming increasingly attractive to global energy investors, especially as geopolitical tensions prompt companies to diversify away from traditional regions like the Middle East.
The continent’s vast, underexplored basins and rising energy demand position it as a key future growth market.
Still, experts warned that without structural reforms, improved governance, and sustained investment in infrastructure, countries like Nigeria may continue to struggle to convert resource wealth into reliable power supply.
Experts said resolving the crisis will demand coordinated reforms, strategic investments, and robust policies to fully harness Nigeria’s energy potential.
