Nigeria’s Energy Compact: Looking beyond Mission-300

The overall position of this article is that the “National Energy Compact for the Federal Republic of Nigeria,” as laudable as it is, is not adequate or sufficiently fit for Nigeria’s needs by 2030. This position is, however, without prejudice to the recent commendable effort by the Federal Ministry of Power (MoP) to develop two landmark policy documents for the power sector: the Nigeria Integrated Energy Plan (NIEP) and the Nigeria Integrated Resource Plan (NIRP)—both of which are elaborations on the objectives that the Energy Compact of Nigeria seeks to achieve—and produced with the financing and technical assistance of some of our development partners.

The National Energy Compact of Nigeria is a very important document, which explains why it has received all the attention it did in this column in the previous three weeks. It is one of twelve such ‘compacts’ presented at the recently held Africa Energy Summit in Tanzania by twelve African countries. The conference, under the aegis of the African Development Bank and the World Bank, unveiled ‘Mission-300,’ the ambitious goal to encourage and mobilise African countries to connect 300 million Africans to electricity by 2030 in pursuit of Sustainable Development Goal 7 (SDG7) of the United Nations. The twelve national compacts represented the commitment of the twelve countries to achieve the goal in their respective countries.

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The following are the reasons the “National Energy Compact for the Federal Republic of Nigeria” is inadequate: 1) For our potential energy market size, the document is not detailed enough; 2) Nigeria’s energy needs by 2030 transcend the goals of Mision-300; 3) What Nigeria urgently needs is a 5-year comprehensive and transformative strategic energy plan; 4) extensive stakeholder consultations will be needed; 5) implementation should be largely private sector-driven; 6) need then for the government to devote most of its attention to rapidly developing the renewable energy sector.

“Government should put in place the policy framework for a private-sector-led grid-power sector in Nigeria, while it concentrates on aggressively developing the renewable enable sector, again with a private-sector led framework.”

I am not recommending a review of the “National Energy Compact of the Federal Republic of Nigeria document.” I will, however, point out a few of its shortcomings: 1) The document is not sufficiently elaborate for the most populous country in Africa, with one of the largest economies and, by implication, one of the largest energy markets. The document is only 26 pages in volume with two annexes, exactly the same as that of Liberia with a population of 5.6 million. On the other hand, pagination of the national energy compacts of Malawi, Tanzania, and Zambia—countries each with a fraction of Nigeria’s population—is 40 pages or more, respectively, with four annexes each, which are indications of how more detailed their national energy compacts are. However, what is lacking in Nigeria’s Energy Compact is made up for in the Nigeria Integrated Energy Plan (NIEP) and the Nigeria Integrated Resource Plan (NIRP). These include the mention of liquefied petroleum gas (LPG) as the only route to achieving universal clean energy by 2030, whereas the NIRP mentions at least five options; and the target of universal electricity connection for all Nigerians by 2030, which the NIRP considers unrealistic, suggesting 2035 or possibly beyond.

Nigeria needs a transformative energy sector five-year strategic development plan that will energise all sectors of the economy. The first question we should ask ourselves is: what kind of economy do we want by 2030? In the context of the African Continental Free Trade Agreement (AfCFTA), for example, we should position the Nigerian economy as “the factory of West and Central Africa by 2030.” Dangote Industries has demonstrated what is possible in this regard. If one man’s bold vision can turn Nigeria into a manufacturing hub for cement and petroleum products in a relatively short period of time, it shows what we can all achieve in five years if we can look beyond our current challenges to seize emerging opportunities on the African continent and leverage our comparative and competitive advantages. So, we need to determine how much least-cost grid power and other energy mix components we can produce by 2030 to power our manufacturing sector with an export-led growth strategy. I will say a minimum of 25,000 megawatts (MW) to 30,000 MW grid power by 2030. This is realisable, provided the government is prepared to let go of owning and managing electricity assets and concentrate on policy formulation and regulation and providing a globally attractive and competitive enabling business environment for the power sector. I have browsed through the NIRP, which is a beautiful policy document. But all I can see in terms of policy is ‘full commercialisation.’ Nowhere is ‘privatisation’ mentioned, although an oblique reference is made to ‘innovative business model.’ There certainly has been appreciable policy activism by the Tinubu administration in the power sector. But we need to achieve the last-mile stretch, which is a bold and unambiguous privatisation policy that will put the private sector in the driver’s seat in realising the ambitious aspirations of the government and people of Nigeria for the power sector.

Recent milestone achievements in power supply need to be commended. We achieved a record available power generation of 6003 MW and a peak evacuation capacity of 5,801.84 MW on March 2, 2025. But we need to remind ourselves that leading peers in Africa, South Africa, and Egypt, each with a fraction of our population, produced between 50,000 MW and 60,000 MW, respectively, in 2020/2021. Brazil, with a population that approximates ours, produced 181,532 MW of power in 2021, and China, with a population of 1.4 billion (roughly six-seven times Nigeria’s), produced 2,920,000 MW a few years ago. Where do we stand with these ‘developing’ countries with respect to power generation? I suggest we benchmark Brazil.

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Government should put in place the policy framework for a private-sector-led grid-power sector in Nigeria, while it concentrates on aggressively developing the renewable enable sector, again with a private-sector led framework.

We need extensive and massive stakeholder consultations that will engender across-the-board ownership to move the power sector forward. The recommended 5-year power sector development plan should incorporate the Energy Compact of Nigeria, the NIEP, and the NIRP, but the main focus should be an ambitious private-sector-led transformational plan to meet Nigeria’s need for enough electricity through grid and non-grid sources to realise both our ambition to be the factory of West and Central Africa by 2030 and Mission-300 goals and objectives.

Mr. Igbinoba is Team Lead/CEO at ProServe Options Consulting, Lagos