‘No Growth Without Electricity’: Rewane Urges Urgent Energy Reform
Economic expert and Managing Director of Financial Derivatives Company Ltd, Bismarck Rewane, has stressed the urgent need for Nigeria to resolve its lingering power supply issues, warning that continued outages pose a significant threat to national economic growth.
Speaking on Channels Television’s Business Morning on Tuesday, Rewane emphasised the impact of electricity instability on Nigeria’s Gross Domestic Product (GDP), particularly in key economic hubs like Lagos and Ogun states.
“There is the opportunity cost, and there is a cost. The cost is that Lagos and Ogun states may constitute about 30% of Nigeria’s GDP. So, if you’re going to have one month of power outage, the impact is effectively one-twelfth of 30%—which is significant,” he said.
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Rewane described Nigeria’s power challenges as deeply rooted and multi-dimensional, citing issues such as cultural barriers, tariff imbalances, underinvestment, and debt forbearance within the sector.
“You cannot grow the economy with what we’ve seen today without a broad power solution,” he added.
“If there is a power outage in Nigeria, it must be resolved—no question. You can’t put a Band-Aid on it. It has to be done, and it has to be done now.”
On economic performance, Rewane noted that Nigeria’s GDP currently stands at approximately $2.45 billion, with a 3.13% growth recorded in the first quarter of the year.
He also observed shifts within the economy, noting that manufacturing’s contribution has declined, while agriculture has grown in visibility, and the service sector remains the primary driver of economic activity.
Turning to oil refining, Rewane explained that the global refining industry is increasingly hub-centered, and that refineries operate on high volume but low margins.
“Refining is a high-volume, low-margin business,” he stated. “It’s important that people realise the scale and technical expertise required. Operational efficiency matters. The margin is the difference between your average revenue and your average cost. Profit is the reality.”
