Energy deficit costs Lagos residents, businesses additional N5.3 trillion annually – Report

The Lagos Economic Development Update (LEDU) 2025, published by the Lagos State Government, reveals that while the state requires approximately 9,000 megawatts (MW) of electricity, it receives a meagre 1,000 MW from the national grid—just 11 percent of demand.

As a result, more than 80 percent of Lagos’ population and businesses rely on off-grid power solutions, predominantly petrol, diesel, or fuel oil generators.

This dependency contributes to high energy costs, inefficiencies, and severe environmental pollution.

The report highlights that off-grid generators in Lagos produce around 15,000 MW daily but at a significantly higher price.

Power generated from these sources costs approximately N130 per kilowatt-hour (kWh) compared to N50/kWh from the national grid. This cost disparity translates to an additional financial burden of N5.3 trillion per year on Lagosians, further reducing disposable incomes, limiting business investments, and slowing overall economic productivity.

“Off-grid generators in Lagos produce about 15,000 MW daily but at exorbitant costs, with power generated at N130 per kilowatt-hour (kWh) compared to the national grid’s N50/kWh. This disparity imposes an additional financial burden of approximately N5.3 trillion annually on residents and businesses, reducing disposable incomes, limiting investments, and weakening economic productivity,” the report stated.

The excessive reliance on fuel-powered generators also exacerbates Lagos’ environmental concerns, contributing to high levels of carbon emissions, noise pollution, and health hazards associated with fossil fuel consumption. Experts warn that unless urgent action is taken to diversify and expand the state’s energy mix, Lagos risks enduring prolonged economic and environmental setbacks.

According to projections in the LEDU 2025 report, Lagos’ electricity demand is expected to surge to 29,212 MW by 2030, driven by rapid urbanization and economic expansion.

The report further highlights the state’s overburdened infrastructure as a huge challenge. It states “Energy infrastructure in Lagos is outdated and highly susceptible to climate impacts, including floods and extreme weather events.”

The push for renewable energy adoption and improved transmission infrastructure is seen as a vital step toward achieving energy security for Africa’s largest megacity.