Power: Manufacturers, LCCI, Others Urge Tegbe To Tackle Liquidity Crisis, Grid Failures

BY CHIKA IZUORA, KINGSLEY OKOH, Lagos, AND ADEGWU JOHN, Abuja

Nigerian manufacturers, the Lagos Chamber of Commerce and Industry (LCCI), and other key stakeholders have called on the newly appointed Minister of Power, Joseph Olasunkanmi Tegbe, to urgently address the power sector’s liquidity crisis, metering gaps, and grid failures that continue to undermine electricity supply and economic productivity.

As the new minister assumes office, stakeholders are renewing calls for urgent solutions to issues that have crippled growth in the sector.

Setting an agenda for the minister, the chief executive officer of the Association of Power Generation Companies (APGC), Joy Ogaji, urged him to address the liquidity problems facing the sector.

Ogaji told LEADERSHIP that the Nigerian power sector is experiencing a significant and deepening liquidity crisis driven by non-cost-reflective tariffs, high operational losses, and payment defaults. According to her, the situation has created a dysfunctional value chain in which generation companies (GenCos) struggle to pay gas suppliers and maintain operations.

Industry reports indicate that the sector’s debt exceeded ₦6 trillion by early 2026.

She said the crisis is creating a vicious cycle of low investment, poor maintenance, declining power generation, and increasing grid instability.

“The situation poses a serious risk of total collapse if it is not addressed through structural reforms such as implementing cost-reflective tariffs, improving metering, and enforcing payment discipline,” she said.

Ogaji also urged the minister to focus on enforcing contractual agreements within the sector.

She said the sanctity of contracts in Nigeria’s power sector has been undermined by weak enforcement, leading to growing distrust among investors and government stakeholders.

According to reports, GenCos are owed over N6.2 trillion in unpaid invoices as of early 2026, a development that has worsened the sector’s liquidity crisis.

She explained that low remittances by Distribution Companies (DisCos) and systemic imbalances are discouraging investment and threatening power generation.

According to Ogaji, inconsistent payment practices and frequent breaches of agreements have eroded trust among operators in the sector.

The association also challenged the minister to ensure that the national grid is properly maintained and strengthened.

She noted that strengthening the grid is essential for improving electricity supply, reducing technical losses, minimising blackouts, and integrating renewable energy sources into the system.

Key strategies, she said, include upgrading ageing infrastructure with modern digital equipment and expanding transmission capacity.

Ogaji added that the association is willing to work with the new minister and urged him to demonstrate the political will needed to implement existing policies and reforms introduced by the current administration.

On his part, the chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said one of the minister’s major tasks should be addressing the country’s metering gap.

Yusuf told LEADERSHIP that the metering deficit remains a critical and long-standing issue in the power sector.

According to industry estimates, more than seven million registered electricity customers still lack meters as of early 2026, forcing many consumers to rely on the controversial estimated billing system.

He noted that the deficit persists despite several government initiatives aimed at increasing meter deployment and improving revenue transparency.

Many customers, he said, continue to receive estimated bills — popularly referred to as “crazy bills” — that do not reflect actual consumption, leading to widespread public dissatisfaction and eroding trust in power sector reforms.

Yusuf also recalled that manufacturers have consistently advocated for reliable and cost-effective electricity supply to support industrialisation, noting that energy costs currently account for between 28 per cent and 40 per cent of production costs for many industries.

The Manufacturers Association of Nigeria (MAN), he said, has repeatedly stressed that stable electricity supply is critical to reducing production costs, improving competitiveness, and driving industrial growth.

Manufacturers, according to Yusuf, are burdened by epileptic power supply and dependence on diesel generators, which reportedly cost the sector over ₦1.5 trillion in 2024 alone.

He said MAN has continued to advocate for dedicated electricity supply to industrial clusters instead of the current unreliable general distribution system.

 

Yusuf also urged the government to promote gas-powered solutions, renewable energy, and embedded or hybrid power systems to reduce dependence on the national grid.

 

He further called on the minister to fast-track implementation of the Electricity Act 2023, which allows for greater private sector participation in electricity generation and distribution.

 

He noted that the federal government recently approved a $238 million power project aimed at improving electricity distribution to industrial clusters.

 

According to him, the government’s proposed 10-year National Industrial Policy (2025–2035) seeks to align energy supply with key industrial zones to promote value addition.

 

He also referenced the ₦75 billion Manufacturing Intervention Fund introduced to support firms with low-interest loans for energy solutions.

 

“The push for reliable and preferential power supply is critical to unlocking Nigeria’s economic potential, reducing reliance on imports, and creating jobs,” Yusuf said.

 

He further stressed the need to recalibrate the country’s transmission infrastructure, which he described as the weakest link in the electricity value chain.

 

According to him, weak transmission infrastructure has prevented the efficient evacuation and distribution of generated power.

 

“Despite improvements in generation, antiquated infrastructure, low investment, and poor distribution capacity continue to cause instability and frequent system collapses,” he said.

 

Yusuf also called for increased investment in the solar energy sector to address chronic power shortages and reduce dependence on fossil fuels.

 

He commended efforts to shift Nigeria from importing finished solar panels to local manufacturing, noting that solar photovoltaic manufacturing capacity has increased from 120MW to 650MW, enabling exports to countries such as Ghana.

 

He said the initiative should be encouraged as part of efforts to stabilise the country’s energy sector.

 

In April 2026, Nigeria reportedly secured about $425 million in investments for eight renewable energy manufacturing facilities.

 

The federal government has also introduced policies to support the sector, including zero per cent import duties on solar panels and simplified customs procedures to encourage local production.

 

Projects such as the $750 million World Bank-funded DARES programme are expected to provide solar electricity to 17.5 million Nigerians.

 

Manufacturers, LCCI Call for Cost-reflective Tariffs, Stronger Regulation

 

Stakeholders in Nigeria’s manufacturing and small business sectors have also renewed calls for cost-reflective electricity tariffs and stronger regulatory oversight, warning that rising tariffs, liquidity challenges, and mounting sector debts are undermining productivity and business sustainability.

 

The national president of the Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, said the power sector remains structurally unviable due to poor cost recovery, weak collection efficiency by DisCos, and a growing debt burden estimated at ₦1.3 trillion owed to GenCos, in addition to about $1.3 billion owed to gas suppliers.

 

Egbesola urged the minister to prioritise reforms that address tariff inadequacies and liquidity constraints, insisting that a properly structured pricing framework is essential for the sustainability of the sector.

 

According to him, Nigeria’s electricity market cannot attract investment or deliver reliable supply without tariffs that reflect actual production and distribution costs, backed by stronger enforcement mechanisms.

 

He also criticised weak regulation and poor compliance with contractual obligations by DisCos, saying they have eroded consumer confidence despite rising electricity bills.

 

Egbesola called for stronger institutional oversight and a more effective regulatory framework to monitor electricity pricing and enforce accountability among operators.

 

He further warned that macroeconomic pressures, including rising interest rates and fuel price increases, have weakened the capital base of many small businesses.

 

“Small businesses are facing multiple shocks. Many are no longer profitable, with declining sales, reduced liquidity, and, in several cases, complete shutdowns,” he said.

 

He noted that high energy costs continue to drive inflation in the production sector, with businesses passing increased operational costs to consumers.

 

Egbesola advised small business owners to adopt survival strategies such as scaling operations to match current realities, leveraging digital platforms, sourcing raw materials locally, and adopting flexible labour arrangements where necessary.

 

However, he stressed that such measures are temporary and that the sector requires comprehensive reforms to restore productivity and competitiveness.

 

Also speaking, chairman of the SMEs Group of the Lagos Chamber of Commerce and Industry (LCCI), Daniel Dickson Okezie, criticised repeated electricity tariff increases, warning that they continue to erode the competitiveness of Nigerian manufacturers.

 

On its part, the Manufacturers Association of Nigeria (MAN) said the privatisation of the power sector has yet to deliver the expected improvements in electricity supply and operational efficiency.

 

MAN director-general, Segun Ajayi-Kadir, said manufacturers are grappling with escalating electricity costs following tariff increases of more than 200 per cent for Band A consumers, alongside rising borrowing costs that have constrained access to capital.

 

He noted that average lending rates rose from 28.06 per cent in 2023 to 35.5 per cent in 2024, pushing total financing costs for manufacturers to about ₦1.3 trillion and limiting expansion plans.

 

Meanwhile, Minister of Power Joseph Tegbe has pledged reforms aimed at restoring confidence in the electricity market.

 

He said the government would focus on improving gas supply, reducing system disturbances, expanding metering coverage, and strengthening transmission infrastructure.

 

Tegbe also promised greater transparency in sector performance, including plans for a public dashboard to track electricity supply and billing efficiency.

 

“We must do things differently. Nigerians deserve transparency, and we must close the metering gap to ensure accountability across the value chain,” he said during his ministerial screening at the National Assembly.

 

Stakeholders said the long-term sustainability of Nigeria’s power sector will depend on urgent reforms that balance cost recovery with affordability while ensuring improved service delivery.

 

 

 

Electricity Workers Demand Review of Power Sector Privatisation

 

Meanwhile, the National Union of Electricity Employees (NUEE) has urged the new minister to prioritise a comprehensive review of the power sector privatisation policy and adopt practical reforms aimed at addressing Nigeria’s persistent electricity crisis.

 

Speaking with LEADERSHIP, acting general-secretary of NUEE, Dominic Igwebike, said the minister must first take time to understand the complexities of the sector before making ambitious promises about fixing the industry within a short period.

 

He stressed that meaningful reforms would require broad consultations with stakeholders and a proper understanding of the industry’s challenges.

 

Igwebike also renewed the union’s opposition to the privatisation of the power sector, describing the policy as a failure that has not translated into improved electricity supply or infrastructure development.

 

According to him, private investors in the sector are more focused on short-term profits than the long-term investments required to improve generation, transmission, and distribution capacity.

 

He also warned that the growing reliance on solar installations by government institutions could further weaken public confidence in the national grid if broader structural issues are not addressed.

 

Igwebike advocated diversification of Nigeria’s energy mix through increased investment in wind energy, hydropower, biodigesters, and decentralised electricity systems.

 

He said developing microgrids across local governments and states would improve electricity generation and supply nationwide.

 

He further argued that Nigeria’s abundant gas resources have not been effectively utilised to strengthen the power sector despite growing global demand for gas exports.

“What the minister should do is understand the sector — its problems, challenges, and possible solutions — so he can develop short-, medium-, and long-term plans,” he said.

“There is no way the problems can be solved overnight. He must engage stakeholders and discuss the way forward.

“We will continue to push for a review of privatisation because it has failed to improve the sector. The minister should also consider decentralising power through microgrids. If communities and local governments can generate electricity and feed excess power into the national grid, electricity supply across the country will improve,” he added.