Energy and economic experts have urged the federal government to prioritise grid stability, transparency and infrastructure upgrades as Nigeria seeks to unlock the full value of a $1 billion steel investment deal with India, warning that persistent power challenges could undermine industrial growth.
The calls followed the appointment of Mr Joseph Tegbe as Minister of Power by President Bola Tinubu on May 1, and the signing of a memorandum of understanding (MoU) by Minister of Steel Development, Prince Shuaibu Audu, with India’s Rashmi Metaliks Group in Kolkata for a three-year investment in Nigeria’s steel sector.
Speaking in separate interviews on Sunday, May 2, in Lagos and Abuja, the experts said the success of the steel deal and broader economic reforms would depend heavily on improvements in electricity supply and governance in the power sector.
Dr Olukayode Akinrolabu, an energy specialist at Lagos State University, said Tegbe’s appointment comes at a critical juncture, with expectations for immediate and measurable progress.
“The minister must prioritise grid stability, transparency in the electricity market and reliable supply,” Akinrolabu said, noting that Nigerians expect fewer system collapses, fair billing and accelerated metering.
He said the sector’s longstanding issues — including liquidity constraints, weak regulatory enforcement and inefficiencies across the value chain — continue to limit performance and investor confidence.
“Nigerians expect at least six months without a total system collapse. Anything less will not inspire confidence,” he added.
Akinrolabu called for clearer disclosure of the sector’s debt profile, estimated at over N6 trillion, alongside a credible repayment framework to restore trust.
“Trust begins with numbers, not promises,” he said.
He also urged the rollout of at least two million electricity meters through a transparent, private sector-driven programme to reduce estimated billing and improve revenue collection.
According to him, liquidity remains the “lifeblood” of the sector, with unpaid generation companies struggling to procure gas, leading to reduced output and heightened risk of grid failure.
To address this, he recommended stricter remittance enforcement for distribution companies, securitisation of legacy debts and targeted subsidies for vulnerable consumers.
On infrastructure, Akinrolabu identified weak transmission systems and inadequate protection mechanisms as major causes of instability, calling for the completion of the Supervisory Control and Data Acquisition (SCADA) system to enable real-time monitoring.
He also advocated increased investment in embedded generation and private sector participation in transmission maintenance, noting that Nigeria’s spinning reserve remains well below global benchmarks.
In Abuja, Dr Emmanuel Eche, an economist at the Federal University, Wukari, said unreliable electricity supply could pose a major risk to the implementation of the steel deal with the Indian firm.
“Steel production is energy-intensive. Without reliable power or gas supply, the cost of production rises significantly,” Eche said.
He urged the government to fast-track dedicated gas supply, captive power solutions and rail links to iron ore sites and ports, warning that infrastructure bottlenecks could erode the competitiveness of the project.
“Without this, a one-billion-dollar capital investment will not translate into competitive steel,” he added.
Eche also called for greater transparency around the MoU, urging authorities to publish detailed terms, timelines, key performance indicators and penalty clauses.
“Convert the MoU into a full investment agreement and make it publicly accessible for accountability,” he said.
He warned that weak Environmental, Social and Governance (ESG) enforcement could expose host communities to pollution and health risks, given the emissions associated with integrated steel plants.
“Enforce environmental standards, community development agreements and carbon efficiency. Nigeria should prioritise gas-based and Direct Reduced Iron technology rather than coal,” he said.
Despite the risks, Eche said the deal offers significant upside. Nigeria’s steel demand, estimated at $10 billion annually, is largely met through imports.
The investment, he said, could reduce import dependence, conserve foreign exchange and support job creation across the steel value chain, from engineering to fabrication.
“Nigeria has more than three billion tonnes of iron ore. This is an opportunity to shift from raw exports to value addition,” he said.
He added that the project aligns with the government’s target of producing 10 million tonnes of crude steel annually by 2030 and could position Nigeria as a regional manufacturing hub.
The deal is also expected to deepen economic ties between Nigeria and India, particularly in steel, mining and industrial development.
However, both experts agreed that without reforms in power supply, logistics and market governance, the anticipated gains may not materialise.