Nigeria’s Industrialisation at Risk Due to Power Challenges
Africa’s richest man and President of the Dangote Group, Alhaji Aliko Dangote, has identified unstable electricity as a major obstacle to Nigeria’s industrial growth.
Speaking during a visit from Zambia’s Minister of Energy, Makozo Chikote, at the Dangote Refinery in Lekki, Lagos, he highlighted how expensive it is to run industries in Nigeria compared to developed nations.
Power Deficiency Raising Costs for Businesses
Dangote explained that businesses in Nigeria operate at 30% higher costs than their counterparts abroad due to poor electricity infrastructure.
Unlike developed countries where industries simply connect to the grid, Nigerian businesses must generate their own power, significantly increasing expenses.
He cited Ethiopia as an example of how stable power can drive profitability.
The Dangote cement plant in Ethiopia is currently the most profitable in the group because the country provides consistent electricity at a fixed rate, allowing for better financial planning.
Policy Instability: Another Barrier to Industrial Growth
Beyond electricity, Dangote also blamed inconsistent government policies for hindering industrial progress.
He compared Nigeria’s regulatory environment to a football game where the goalpost is suddenly moved just as a player is about to score. Constant policy changes, he said, create uncertainty and discourage investments.
Government Benefits from Industrialisation
Dangote emphasized that the government is a major beneficiary of industrialisation through taxes, including:
- 30% corporate tax
- 7.5% value-added tax (VAT)
- Education and health taxes
- 10% withholding tax on dividends
He warned that when businesses struggle or shut down, the government also loses revenue, making it essential to address these challenges.
The Way Forward
For Nigeria to achieve sustainable industrial growth, Dangote urged policymakers to:
- Improve electricity supply.
- Maintain consistent economic policies.
- Recognize industrialisation as a key driver of national development.
As industries continue to struggle with high costs and policy uncertainties, stakeholders are calling for urgent reforms to unlock Nigeria’s economic potential.
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