Recently, I posed three questions to my graduate Chemical Engineering class at ABU. Nigeria is the largest producer of cassava in the world, with annual production of about 60 million metric tons. Why then do we import industrial and pharmaceutical starch? Cassava can easily be converted into industrial ethanol; why do we still import about 350 million liters annually? Nigeria is also Africa’s second-largest onion producer, with approximately 2.1 million metric tons produced annually; why then do we import dried onions?
After long, structured, evidence-based evaluations, we arrived at one major conclusion: the lack of reliable and sustainable power supply. That is why I was thrilled when Aliko Dangote announced plans for a massive 20,000-megawatt power project. Factories cannot compete, hospitals cannot function efficiently, digital economies cannot expand, and households cannot attain decent living standards without stable and affordable electricity. No nation industrializes sustainably in darkness.
Dangote’s ambition is enormous. To put it into perspective, Nigeria currently struggles to deliver between 4,000 and 5,000 megawatts of electricity to more than 200 million people. In many periods, available power generation falls even below that modest figure. Thus, Dangote’s proposal is not merely another business expansion; it is potentially one of the most consequential industrial undertakings in modern African history.
Dangote himself framed the initiative correctly. Beyond cement, refining, petrochemicals, and fertilizer, Nigeria desperately needs energy. Energy is the oxygen of industrial civilization. Without it, every other economic reform remains partially crippled.
Yet, as the German philosopher Johann Wolfgang von Goethe famously suggested, before one achieves a major goal, one must first accomplish several foundational tasks. In the case of Dangote Power, the most important question is not whether Dangote possesses the financial capacity. The real question is whether Nigeria possesses the institutional, regulatory, and infrastructural conditions necessary for such a project to succeed.
The history of Nigeria’s power sector suggests caution. Nigeria’s electricity sector is littered with ambitious announcements that produced disappointing outcomes. Billions of dollars have disappeared into reforms, privatisation, intervention funds, transmission upgrades, and emergency programmes, with little visible transformation for ordinary Nigerians. One important example is the ongoing collaboration between Nigeria and Siemens Energy under the Presidential Power Initiative (PPI). The project, initially launched during the administration of Muhammadu Buhari and later revived under Bola Ahmed Tinubu, aims to modernise Nigeria’s electricity transmission and distribution infrastructure. The goal is ambitious: to raise grid capacity in phases from current levels to 11,000 MW and eventually 25,000 MW. The implications are massive. The initiative involves more than 100 substations, new transmission facilities, and thousands of distribution transformers. Yet progress has been frustratingly slow. This raises a critical strategic question: Is Dangote’s proposed power project intended to complement the Siemens initiative or operate independently of it?
If the answer is unclear, Nigeria risks creating another fragmented mega-project disconnected from the realities of the national grid. Generation without evacuation capacity is meaningless. Producing 20,000 MW is one thing; transmitting and distributing it reliably is an entirely different challenge. Electricity is an ecosystem in which every component must function simultaneously.
But Nigeria’s biggest electricity problem is governance, not technology. The crisis is often mistakenly presented as a purely technical problem. It is not. The technologies required to generate, transmit, and distribute electricity are already mature and widely available around the world. Nigeria’s real challenge is governance failure.
The former Minister of Power, Adebayo Adelabu, repeatedly promised improvements in electricity supply, yet the country has struggled to maintain even 6,000 MW consistently on the grid. In several periods, actual delivered power fell to levels barely sufficient for a single large global city. The consequences are devastating. The World Bank has estimated that unreliable electricity costs Nigeria tens of billions of dollars annually through lost productivity, damaged equipment, reduced industrial competitiveness, and massive dependence on private diesel generators. The tragedy is not simply insufficient megawatts. The tragedy is institutional paralysis. Even the wealthiest investor can become trapped within dysfunctional institutions.
The lesson from the Dangote Refinery is instructive. Despite being one of the most sophisticated industrial projects in Africa, the refinery faced avoidable turbulence after commissioning. There were disputes over crude supply arrangements, conflicts with regulators, uncertainty among marketers, and prolonged public disagreements involving the Nigerian Midstream and Downstream Petroleum Regulatory Authority. These experiences should serve as warnings. Large-scale industrial projects in Nigeria do not fail only because of engineering problems; they often fail because stakeholder alignment was neglected from the beginning. For example, what happens to the existing generation companies, distributors, and transmission infrastructure?
The transmission question cannot be ignored, and the answer cannot simply be to combine transmission with generation. Suppose the company successfully generates 20,000 MW tomorrow. Who controls the transmission infrastructure? Can the existing national grid evacuate such electricity? Will the Transmission Company of Nigeria possess the technical and operational capacity to manage such expansion? Without clear answers to these questions, power generation risks becoming an expensive theoretical achievement. Nigeria’s transmission network remains fragile and prone to repeated collapses. Grid disturbances have become so frequent that they no longer shock Nigerians. A modern industrial economy cannot be built on a collapsing transmission system.
Dangote may, therefore, need to think beyond conventional power generation. The project may require integrated investments in transmission infrastructure, embedded generation systems, industrial power corridors, or regional mini-grid clusters tied directly to manufacturing hubs. This would represent a more realistic model than depending entirely on the fragile national grid.
Another major obstacle is revenue collection. Nigeria’s electricity sector suffers from a dangerous financial contradiction. Consumers complain of poor supply and resist tariff increases, while operators complain of non-payment and insufficient cost recovery. The result is a permanently distressed industry. One report indicated that a large percentage of thermal power plants suffer gas shortages because gas suppliers remain unpaid. This creates a vicious cycle: poor collection reduces liquidity, liquidity shortages reduce gas supply, reduced gas supply lowers generation, and poor electricity supply discourages consumers from paying their bills. No electricity sector can survive long under such conditions.
How then can Nigeria develop policies capable of breaking this vicious cycle? The greatest contribution Dangote can make to Nigeria may ultimately go beyond constructing power stations. Nigeria urgently requires a stable, long-term national energy policy insulated from political instability and regulatory uncertainty. Investors need predictable rules. Contracts must be respected. Regulators must operate professionally rather than politically. If Dangote truly intends to transform Nigeria’s electricity landscape, he must become a champion of broader sectoral reform. He possesses unusual influence, financial credibility, and industrial experience. Such influence should be deployed not merely to secure licenses or approvals, but also to advocate durable institutional reforms. Nigeria needs at least three things: stable electricity market regulations, cost-reflective but socially balanced pricing, and long-term industrial energy planning. Without these foundations, even the most ambitious power project may eventually encounter the same frustrations that crippled earlier initiatives.
Despite these concerns, Dangote’s announcement remains potentially transformative. Nigeria desperately needs bold industrial investments. The country cannot continue importing prosperity while exporting raw materials and human talent. For example, we cannot continue exporting cassava while importing its more costly, higher-value derivatives. It is equally absurd to export onions only for other countries to use electricity to dry them and sell them back to us at much higher prices.
A successful 20,000 MW initiative could reshape manufacturing, agriculture, mining, digital services, transportation, and employment across the country. It could become the foundation for a genuine industrial revolution. Nigeria does not merely need more electricity generation. It needs an electricity system that works; technically, financially, institutionally, and politically. That is the real challenge before Dangote Power. And that is what must be done first.
Baba El-Yakubu is a professor of Chemical Engineering, Ahmadu Bello University byjibril@gmail.com