‘Electricity shortages key barrier to Africa’s industrial growth’

Persistent power shortages and unreliable electricity supply are undermining manufacturing growth and limiting industrial competitiveness across Africa, Schneider Electric has warned, stressing that energy deficits remain one of the biggest obstacles to economic transformation.

The company said the continent’s drive toward industrialisation, digital transformation, and regional trade expansion is increasingly being constrained by inadequate energy infrastructure, despite growing ambitions under initiatives such as the African Continental Free Trade Area.

General Manager, Anglophone Africa, at Schneider Electric, Ajibola Akindele, said energy remains the foundation of every major development pathway, from industrial growth to digital transformation and urbanisation.

“Every serious conversation about Africa’s future eventually arrives at the same point: energy,” he said in a note shared with The PUNCH.

He said West Africa’s ambitions are not in question but stressed that the region’s energy system has not evolved at the same pace as its economic aspirations.

“The region’s ambition is not in question…Yet beneath all of this progress sits a structural constraint that has not evolved at the same pace. The energy system,” he said.

Akindele noted that Africa’s energy access challenge remains significant, with nearly 600 million people across the continent still lacking electricity, according to World Bank data. Nigeria alone accounts for more than 80 million people without access, making it one of the largest energy access gaps globally.

He noted the situation is not only an infrastructure deficit but also a productivity ceiling that limits industrial output and economic efficiency across the region.

“This is not simply an infrastructure gap. It is a productivity ceiling,” the expert said.

The Schneider Electric executive also highlighted a major financing gap in the sector, noting that Africa requires an estimated $200bn annually to achieve its energy access goals by 2030, while current investment levels are around $110bn.

He said the shortfall represents a structural challenge that affects not just energy availability but broader economic development outcomes.

Akindele pointed to two accelerating forces increasing pressure on West Africa’s energy systems: the rapid expansion of artificial intelligence and digital infrastructure and the region’s push toward industrial localisation under the AfCFTA.

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He noted that global data centre electricity demand rose by about 17 per cent in 2025, driven by AI and cloud computing, while Nigeria’s growing data centre capacity is already dependent on alternative power sources due to grid instability.

At the same time, manufacturers across West Africa continue to rely heavily on diesel generators to maintain production, increasing costs and reducing competitiveness.

“These two forces, digital acceleration and industrial expansion, are not separate narratives. They are converging on the same constraint,” he said.

Akindele argued that solving the energy challenge requires more than expanding generation capacity, stressing the need for improved energy efficiency and stronger integration between energy systems and industrial planning.

He warned that energy policy and industrial policy are often treated separately in the region, limiting the effectiveness of both: “The connection between them is often assumed rather than engineered.”

He added that manufacturing competitiveness depends heavily on energy efficiency at the equipment and systems level, noting that inefficiencies continue to widen the gap between local producers and global competition.

Nigeria’s manufacturing sector currently contributes about 12 per cent of GDP but continues to face constraints from unreliable power supply despite policy efforts to promote local production and import substitution.

Akindele concluded that West Africa’s industrial future will depend not only on increasing energy supply but also on integrating energy more intelligently into industrial systems and economic planning.

“Energy is not simply infrastructure. It is the enabling condition for every serious growth strategy on the continent,” he said.

Schneider Electric Chairman Jean Tricoire said energy underpins all forms of scaling in modern economies.

The gap between ambition and capacity is also financial. Achieving Africa’s energy and access goals by 2030 is estimated to require around $200bn annually. Current investment levels sit closer to $110bn. The difference is not just a funding shortfall. It is a strategic gap that shapes every downstream development outcome.