In the lead up to the 2027 elections, Nigerian subnational leaders are fully engaged and heavily politically distracted. But once the curtains drop and the next business of governance takes shape, governors are being asked to take full and frontal advantage of the country’s new electricity environment for the state growth strategy it offers.
Masah Ikus, power and energy infrastructure strategist, in a third installment of his five-part series for Business a.m., says forward looking governors should no longer view electricity as a mere utility issue, but a growth strategy.
Ikus disclosed that governors who position their states to solve power constraints faster than their neighbours will be positioning themselves to attract the lion share of manufacturing plants and warehousing hubs, agro-processing facilities and technology campuses, real estate development, as well as SME expansion.
For such states, these would mean a bumping up of their earnings in the form of higher PAYE collections, increased land values, and stronger Internally Generated Revenue (IGR), Ikus noted.
Providing details of this economic upside for states who embrace Nigeria’s new electricity environment, Ikus stated that a state that enables 200 MW of reliable new electricity supply, would find that such a capacity can support multiple industrial estates, thousands of SMEs, and several commercial clusters.
“For many states, this reform is a more durable revenue strategy than increasing taxes on struggling businesses,” he stated.
Using Lagos as a case study, he writes: “Lagos State commands one of Africa’s largest economies, with a 2025 nominal GDP estimate of roughly N54.77 trillion in 2024 and projected to grow to N66.47 trillion in 2025 according to the Lagos Economic Development Update (LEDU 2025). However, its productivity is bounded by its energy footprint; the state receives approximately 9,649 GWh (9.6 TWh) of grid electricity annually through (IE Energy Lagos Limited) formerly Ikeja Electric and (Excel Distribution Company Limited) formerly Eko DisCo.
“A 10 percent supply expansion would deliver an additional 965 GWh annually — equivalent to 110 MW of continuous Baseload power. To reliably generate and distribute this energy, Lagos requires 150–200 MW of new embedded generation capacity alongside robust transmission and distribution upgrades. Based on international infrastructure benchmarks, this network overhaul demands a capital investment of roughly $300 million (N420 billion).
“While the upfront cost is substantial, the economic returns are transformative. Global energy-growth studies by institutions like the World Bank demonstrate that a 10 percent increase in electricity availability strongly correlates with a long-term GDP expansion of 5–10 percent. Applied to Lagos, this infrastructure upgrade could unlock N3.32 – N6.647 trillion in cumulative economic value or (800% – 1,580%) gain on the investment.
“This multi-trillion Naira GDP expansion is driven by a cascade of commercial benefits: driving industrial manufacturing, scaling small and medium-sized enterprises (SMEs), and reducing the heavy financial burden of private diesel generation. Furthermore, lower operating costs attract sustained foreign direct investment, boost state internally generated revenue (IGR), and catalyse large-scale job creation across emerging tech and logistics hubs,” Ikus explained.
He persuaded subnational governors to see that optimising the power sector proves that electricity infrastructure is not a public utility drain, but a high-yield strategic investment that multiplies its input value to accelerate macroeconomic development.
He identified what he called a new competitive landscape for first mover advantage among the subnationals in the country, noting that several states hold immediate strategic advantages, which he outlined as follows:
Lagos: Large demand base and customers with a high willingness to pay for reliability.
Ogun: Industrial proximity to Lagos and established manufacturing corridors.
Kaduna & Kano: Large commercial populations and massive solar potential.
Rivers & Delta: Gas-linked advantages capable of supporting heavy industrial strategies.
He identified what he called the tier-two winners scenario where success will not be reserved for the biggest economies, but states with smaller GDPs but faster execution and better organisation may outperform larger rivals.
He said states that are serious about taking full advantage of the country’s new electricity environment would need to take five actions to realise the benefits.
“Passing a state electricity law is only the first step. To attract capital, governors must prioritise these five execution-focused actions”, which he then goes on to describe as:
- Build credible regulatory institutions: Capital avoids uncertainty. States need professional regulators with transparent licensing and predictable enforcement.
- Map high-value demand clusters: Electricity projects perform best where demand is concentrated — identify industrial estates, hospitals, and agro-belts early.
- De-risk early bottlenecks: Solve the issues developers dislike most: Land acquisition delays, community disputes, and right-of-way access.
- Offer smart incentives: Speed and certainty often matter more than cash incentives. Focus on fast-track approvals and transparent tariff review formulas.
He warned states to avoid “patronage risk”, noting that power markets are complex, and that placing politically connected but technically weak appointees in strategic positions can destroy viable projects. “Leadership quality will be measurable in megawatts,” he concluded.
