Despite Nigeria’s immense water resources, the nation’s electricity supply remains precarious as 58 percent of identified hydroelectric projects remain “frozen” in various stages of abandonment or technical suspension. A recent industry audit reveals that a significant portion of the country’s renewable energy roadmap is currently stalled due to funding gaps, regulatory bottlenecks, and contractual disputes. For the Nigerian economy, this paralysis in the hydro sector represents a missed opportunity to diversify the energy mix away from an over-reliance on thermal gas plants, which are frequently plagued by gas supply debt and pipeline vandalism.
The economic consequence of these stalled projects is a direct constraint on Nigeria’s industrialization goals. Hydroelectric power, traditionally the most cost-effective source of baseload electricity in the country, currently contributes a fraction of its potential to the national grid. The reliance on expensive, privately-owned diesel and petrol generators to fill the gap costs Nigerian businesses an estimated $26 billion annually. This “energy tax” erodes the competitiveness of local manufacturers, making Nigerian-made goods more expensive than imports and contributing to the country’s persistent trade deficit.
Analytically, the “freezing” of over half of the nation’s hydro projects points to a deeper crisis in infrastructure financing and Public-Private Partnership (PPP) frameworks. Many of these projects, such as the multi-billion dollar Mambilla and various small-scale hydro initiatives, are caught in protracted legal battles or lack the sovereign guarantees necessary to unlock international funding. From a fiscal perspective, the inability to operationalize these assets means that the massive capital already sunk into feasibility studies and preliminary constructions remains “dead capital,” yielding no return for the federation while the interest on related loans continues to accrue.
The impact on the “Renewed Hope” administration’s energy transition plan is another critical dimension. As the world shifts toward green energy, Nigeria’s failure to harness its hydro potential hinders its ability to meet international carbon emission targets. Hydroelectric power provides a stable, “always-on” alternative to solar and wind, making it essential for stabilizing the grid as more intermittent renewables are introduced. By allowing these projects to stay frozen, Nigeria is not only prolonging its immediate power outages but also delaying the transition to a modern, sustainable energy economy that could attract significant “green” foreign direct investment (FDI).
Furthermore, the regional economic disparity is exacerbated by the lack of decentralized hydro power. Many of the stalled small-scale hydro projects are located in rural and North-Central regions where they could serve as independent power hubs for agricultural processing. Their abandonment forces rural economies to remain at a subsistence level, unable to transition into value-added manufacturing due to the lack of reliable power. Reviving these projects would act as a catalyst for rural electrification, stemming the tide of rural-urban migration and creating localized jobs in the maintenance and operation of power infrastructure.
The long-term economic outlook for Nigeria hinges on a decisive “unfreezing” of these strategic assets. This requires a transparent audit of all stalled contracts, the resolution of outstanding legal encumbrances, and a more robust regulatory environment that protects private investors from policy somersaults. As the Ministry of Power seeks to implement the 2023 Electricity Act, the focus must shift toward creating “special intervention zones” for hydro development. Achieving a stable power supply is not just a technical challenge; it is the most fundamental prerequisite for driving the 7 percent annual GDP growth target set by the federal government.
