Aliko Dangote, Africa’s richest man and President of the Dangote Group, has linked Nigeria’s industrialization struggles to unstable electricity and inconsistent government policies, warning that unless these issues are tackled with urgency, Nigeria’s economic growth will remain stunted.
Speaking while hosting Zambia’s Minister of Energy, Makozo Chikote, at the Dangote Refinery in Lagos, Dangote lamented that operating a business in Nigeria is 30% more expensive than in developed countries due to unreliable power supply.
“If there’s no power, there won’t be growth. For example, anything I’m going to do abroad will cost me maybe 30% cheaper than here, because abroad is plug-and-play. You just go, no infrastructure construction. You just build a factory, and you connect to the network; that’s all,” he explained.
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He cited Ethiopia as an example of how stable electricity can transform industrial operations, noting that Dangote’s most profitable cement plant is in the East African country because it enjoys consistent and affordable electricity.
“If you look at it today, I tell you that our most profitable cement factory is in Ethiopia because there’s no investment in power. They gave us power at the same rate for five years. So, we plan—it’s a one-price electricity continuously,” he stated.
Nigeria’s Electricity Tariff System Has Failed, Government Admits
Dangote’s remarks coincide with mounting concerns over the federal government’s lack of a clear strategy to fix Nigeria’s chronic power problems.
Recently, the Minister of Power, Adebayo Adelabu, admitted that the Band A electricity tariff structure is failing. Under this system implemented on April 3, 2024, by the Nigerian Electricity Regulatory Commission (NERC), customers were grouped into different bands based on the number of hours of electricity supplied per day. Band A customers, who were supposed to receive 20–24 hours of power daily, were required to pay higher tariffs, while lower bands received less power at cheaper rates.
However, the policy has proven ineffective as many Band-A customers continue to experience prolonged blackouts despite paying higher tariffs. The situation has fueled frustration among consumers and businesses, with many questioning the logic behind the model.
“The current electricity pricing system is not working as planned, and we are working on a more efficient structure,” the power minister recently admitted.
Industrialists Warn: No $1 Trillion Economy Without Stable Power
Industry leaders have long argued that if the Tinubu administration is serious about its vision of growing Nigeria into a $1 trillion economy, solving the power crisis must be a top priority.
Dangote reinforced this view by highlighting how much Nigerian businesses spend on self-generated electricity, a cost burden that makes local production far less competitive than in countries with stable power.
He also warned that inconsistent government policies discourage investment in industrialization.
“One of the problems of industrialization is inconsistencies in government policies, where, just like a footballer, you’re about to score the goal, and the government will remove the goalpost and point behind you that the goalpost is behind. So, you have to now turn. Once you turn back, you have a lot of challenges to get to that goalpost again,” he lamented.
Government Losing Billions from Industrial Failures
Beyond businesses, Dangote noted that the biggest loser when industries struggle or shut down is the government itself, as it collects significant revenue from corporate taxes.
He revealed that for every N1 generated in his cement business, 52 kobo goes to the government in taxes, including:
- 30% corporate tax
- 7.5% value-added tax (VAT)
- 2% education tax
- 1% health tax
- 10% withholding tax on dividends paid to shareholders
“This is just for the Federal Government. When you add the state and local government taxes, the figure becomes even higher,” he added.
Dangote stressed that if businesses continue to collapse due to unreliable power and inconsistent policies, the government will suffer major revenue losses.
“When a business fails, one of the biggest losers is the government. Industrialization is key to national development, and policymakers must understand that,” he warned.
The Tinubu administration has set ambitious economic targets, including attracting foreign investment and boosting industrial output. However, with power shortages persisting and tariff policies failing, many experts doubt whether the government is prepared to address the root causes of Nigeria’s electricity crisis.