Grace Ashiru
Aliko Dangote is preparing a major move into Nigeria’s power sector, with plans to generate 20,000 megawatts of electricity. The proposal could significantly expand his business empire beyond cement, fertiliser, oil refining and other industrial operations.
The plan was revealed during a discussion with Makhtar Diop, managing director of the International Finance Corporation. Dangote said his group is now looking at power generation as part of a wider push to meet Africa’s biggest industrial needs, including energy, fertiliser and key production inputs.
The proposed 20,000MW project would be far larger than Nigeria’s current electricity output. Despite repeated government promises to improve supply, the country has struggled to generate and deliver enough power for its population and businesses. BusinessDay reported that supply has often remained around 3,331MW, while even the government’s 6,000MW target has been difficult to sustain.
Nigeria’s unreliable power supply has long been one of the biggest obstacles to industrial growth. Many households and companies still depend on diesel and petrol generators, raising production costs and weakening competitiveness. According to BusinessDay’s reference to World Bank data, poor power supply costs the Nigerian economy about $29 billion each year.
Dangote’s plan comes after the launch of his 650,000-barrel-per-day refinery and the expansion of his fertiliser operations. The group believes its stronger cash flow and asset base could support another large infrastructure investment.
However, the project would face major challenges. Nigeria’s transmission network remains weak and may not be able to carry the level of electricity Dangote wants to generate. BusinessDay reported that the grid currently struggles to handle even 8,000MW without serious stability risks.
Another challenge is the financial structure of the power sector. Distribution companies often struggle to collect enough revenue, which creates debts across the system and affects payments to gas suppliers and power generation companies. Gas shortages have also limited the performance of many existing thermal plants.
Dangote may try to reduce those risks by relying on his own gas and energy assets. His wider strategy appears to be based on vertical integration, with investments in fertiliser, mining, port infrastructure and LNG all supporting each other.
Still, delivering a 20,000MW power project would require more than private investment. It would need major reforms in transmission, gas supply, tariffs, regulation and coordination across Nigeria’s electricity market.
For now, the plan signals Dangote’s ambition to take on one of Nigeria’s toughest economic problems. But whether the project can succeed will depend on whether the country’s fragile power system can support such a large private-sector push.
