Lagos State now generates more electricity off-grid than Nigeria’s entire national grid, a new report by the Africa Finance Corporation (AFC) has revealed, highlighting a deepening energy crisis across the country.
The report, titled “State of Africa’s Infrastructure Report 2025” and obtained on Monday, estimates that Lagos’ off-grid capacity exceeds 19 gigawatts. Far above the national grid’s struggling output of 4 to 5 gigawatts. It attributes this shift to chronic grid failures and rising urban and industrial demand unmet by centralised systems.
“A growing share of generation is now occurring outside the grid,” the report noted, “particularly in Africa’s largest economies, Nigeria and South Africa, where unreliable supply has forced homes and businesses to rely on petrol and diesel generators.”
According to the AFC, this boom in off-grid and captive power where companies build their own diesel or gas plants is not a sign of progress but a response to systemic failure. It warns that while solar rooftops gain global attention, thermal generation used heavily in industries is largely ignored in official statistics, despite captive plants often supplying between 20MW to 200MW per site.
The AFC further cautioned that without urgent investment in large-scale, reliable grid infrastructure, Africa could fall into a “low-energy equilibrium”. A situation where electricity access figures improve on paper, but actual supply remains too weak to support growth.
The findings challenge ongoing efforts by the World Bank and African Development Bank to connect 300 million Africans to electricity by 2030. Despite a $40 billion commitment toward grid expansion and policy reforms, AFC says the goal is at risk as more power generation happens outside official systems.
Across Africa, energy development lags behind population and economic growth. From 2013 to 2023, electricity generation grew by less than 2% annually, below the population growth rate of 2.42% and economic growth of 3%. In contrast, the Middle East and Asia-Pacific saw annual increases of 3.8% and 4.5%, respectively.
In 2024, Africa added only 6.5GW of utility-scale power, just a fraction of India’s 18GW and far behind the 48.6GW added by the United States.
The AFC warns that Africa’s vast untapped hydropower, geothermal, and solar resources remain stranded due to poor infrastructure and underinvestment. Without a massive scale-up, the continent risks locking itself into a future where electricity is widely sought but barely sufficient.
“Going off-grid is often not a low-cost solution,” the report stated. “It’s a last resort. And the costs up to four times higher than grid power in some countries, are eating into industrial competitiveness.”
As demand rises with urbanisation and industrialisation, the report concludes, Africa faces a stark choice: scale up reliable grid power or risk falling behind.
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