A new report by the Africa Finance Corporation (AFC) has revealed a sobering paradox in Nigeria’s power landscape: off-grid and self-generated electricity in Lagos State now exceeds the entire nation’s grid-connected output.
The revelation reveals an escalating energy crisis in Africa’s most populous country and calls into question the effectiveness of longstanding electrification plans.
According to the State of Africa’s Infrastructure Report 2025, issued on Monday, Lagos alone generates more than 19 gigawatts of off-grid electricity—nearly four times the national grid’s average output of 4 to 5 gigawatts. These figures reflect a silent but sweeping shift in energy supply, driven largely by necessity, not strategy.
“In Nigeria, unreliable public supply has pushed millions of households and firms to rely on petrol and diesel generators,” the report stated. “Captive generation is especially widespread among industrial and commercial users.”
For the average Lagos resident, this reality is no surprise. Whether it’s a family relying on a noisy generator to power fans on a sweltering night or a small business burning through diesel to stay operational, the burden of self-sufficiency has long fallen on the people. But the scale, as revealed by the AFC, is staggering.
Across Nigeria, the trend is echoed in cities large and small businesses, unable to depend on the national grid, and are increasingly investing in dedicated gas or diesel plants. In Lagos, these installations are no longer exceptions but the rule. A growing number of industrial estates and commercial hubs operate entirely on self-generated power, reflecting not only the failure of the centralised system but also the resilience of citizens and enterprises determined to keep the lights on.
The report warns, however, that this shift is a “market signal,” not a mark of progress. “Going off-grid is not always a low-cost solution,” it notes. “It is often a last resort.”
A 2019 study by the Energy for Growth Hub cited by the report found that self-generated power costs nearly twice as much as grid electricity in Nigeria and up to four times more in Ethiopia. These high costs erode industrial competitiveness and worsen the economic penalty of underinvestment in national infrastructure.
The implications stretch beyond Nigeria. The AFC report paints a dire continental picture: unless urgent interventions are made, the number of Africans without access to electricity could remain stagnant at current levels through 2030. This directly contradicts ambitious plans by institutions like the World Bank and African Development Bank, which have pledged $40 billion to connect 300 million people in sub-Saharan Africa by the end of the decade.
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But the report casts doubt on the feasibility of that target, pointing to slow growth in utility-scale generation and a heavy reliance on piecemeal solutions.
Between 2013 and 2023, Africa’s electricity generation grew by less than 2% annually, lagging behind both population growth (2.42%) and economic growth (3%). In stark contrast, the Middle East and Asia-Pacific regions reported generation growth of 3.8% and 4.5%, respectively. In 2024 alone, Africa added just 6.5GW of utility-scale power, far behind India’s 18GW and the United States’ 48.6GW.
South Africa, Africa’s second-largest economy, is experiencing its own off-grid boom. Following a 2022 policy reform removing licensing barriers, embedded power generation in the country surged. By the end of 2023, capacity had jumped from just 23 megawatts in 2019 to 4.5GW, with over 1GW of solar added in 2024 alone.
Yet even these gains are uneven and often underreported. The AFC report criticises the global focus on solar rooftops and off-grid renewables, noting that thermal generation, particularly in industry, remains poorly tracked despite its growing significance. Captive thermal plants, such as those used by cement factories or mining operations, can produce between 20MW and 200MW per site.
At the heart of the report is a stark warning: Africa’s current trajectory points to a “low-energy equilibrium,” a scenario where electricity access statistics improve on paper, but the volume and reliability of supply remain too weak to support real economic growth.
“This is not merely stagnation. It is a deterioration in meaningful energy consumption,” the AFC warns.
Despite being blessed with immense untapped potential—Africa has the world’s largest undeveloped hydropower resources, abundant geothermal reserves, and some of the highest solar irradiation levels globally—these assets remain stranded due to poor infrastructure and underinvestment.
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