Off-grid and self-generated electricity in Lagos State has overtaken Nigeria’s entire grid-connected capacity, according to the State of Africa’s Infrastructure Report 2025 by the Africa Finance Corporation (AFC). The report paints a stark picture of the deepening energy crisis in Africa’s largest economy—and across the continent.
Despite multibillion-dollar efforts by the World Bank, African Development Bank, and other partners to connect 300 million people to electricity in sub-Saharan Africa by 2030, the report warns that without urgent intervention, electricity access levels could remain unchanged by the end of the decade.
According to the AFC, the continent faces a growing energy bottleneck, especially in its largest economies—Nigeria and South Africa—where a significant share of power generation now occurs outside national grids through off-grid, embedded, and captive systems.
“In Lagos alone, off-grid capacity is estimated to exceed 19 gigawatts—far surpassing the national grid’s output, which consistently struggles to deliver 4 to 5 gigawatts,” the report revealed.
This trend reflects not only innovation but also the failure of centralized power systems to meet increasing urban and industrial demand. With Nigeria’s public power supply deemed unreliable, millions of homes and businesses have turned to petrol and diesel generators. For large commercial and industrial operators, captive generation—where enterprises build their own diesel or gas power plants—has become the norm.
The report highlights that these developments are not unique to Nigeria. South Africa experienced a similar shift after removing licensing requirements for embedded generation in 2022. By the end of 2023, private embedded capacity surged to 4.5GW—up from just 23 megawatts in 2019—with more than 1GW of private solar capacity added in 2024 alone.
However, official statistics fail to reflect the scale of these changes. While rooftop solar often grabs headlines, the AFC notes that thermal self-generation—used by industries such as mining, cement production, and manufacturing—remains significantly underreported. Individual captive power plants can add between 20MW and 200MW per site.
Rather than celebrating this off-grid boom as progress, the AFC sees it as a warning sign. “Going off-grid is not always a low-cost solution—it’s often a last resort,” the report states. A 2019 study by Energy for Growth Hub found that self-generated electricity costs roughly twice as much as grid power in Nigeria and South Africa, and up to four times more in Ethiopia—undermining industrial competitiveness and increasing production costs.
The rise of self-generation, the report argues, is a market signal highlighting suppressed demand, untapped investment potential, and an urgent need to expand reliable grid access.
“Africa has some of the world’s richest untapped energy resources,” the AFC notes, citing vast hydropower, geothermal, and solar potential. Yet these assets remain largely unexploited due to weak infrastructure and underinvestment, turning resource abundance into an economic constraint.
Electricity generation in Africa grew by less than 2% annually between 2013 and 2023—lagging behind both population (2.42%) and economic growth (3%). For the first time in two decades, per capita electricity consumption is declining—a sign not of progress, but of backsliding.
In comparison, electricity generation in the Middle East and Asia-Pacific grew by 3.8% and 4.5% annually, respectively, over the same period. In 2024, Africa added just 6.5GW of utility-scale power—less than one-third of India’s 18GW renewable additions and a fraction of the United States’ 48.6GW.
The report warns that unless investments in large-scale, reliable, and affordable grid infrastructure are dramatically scaled up, Africa risks becoming trapped in a “low-energy equilibrium”—where more people are connected, but the volume and quality of power remain too poor to support real development.
“This is not just stagnation in electricity access,” the report states. “It is a deterioration in meaningful energy consumption. If current trends continue, Africa’s development ambitions may be fundamentally undermined.”
As urbanisation and industrialisation intensify, the report concludes, African leaders face a clear choice: scale up power infrastructure or fall further behind in global economic transformation.
