JICA Warns Energy Inefficiency Drains Productive Economy

•Advocates mandatory standards, enforcement to curb costly energy waste

James Emejo in Abuja

Japan International Cooperation Agency (JICA) has identified energy inefficiency as a major drag on Nigeria’s productive economy.

It said businesses could significantly cut operating costs and improve productivity by investing in energy-efficient technologies.

JICA stressed that energy inefficiency was quietly inflating business costs and weakening productivity.

Chief Representative of JICA in Nigeria, Ishigame Keiji, described energy efficiency as the “first fuel”, stating that the cheapest unit of energy is the one that does not have to be produced.

Keiji spoke at a two-day national workshop on energy efficiency and conservation organised by JICA and Energy Commission of Nigeria (ECN), with the theme, “Accelerating Energy Efficiency and Conservation in Nigeria: From Policy to Implementation, Regulation and Measurable Impact.”

The agency said the economic burden extended beyond electricity consumption, as industries were forced to spend heavily on self-generated power while households, businesses, and public institutions continued to operate inefficient appliances and systems.

He said improving efficiency across buildings, industries, transportation, and appliances could lower energy costs, increase productivity, and strengthen the country’s energy security.

“By adopting energy efficiency technologies in buildings, industries, transportation and appliances, Nigeria can reduce energy costs, improve productivity and enhance energy security,” he said.

He added that Japan’s development experience demonstrated that energy efficiency could serve not merely as an environmental intervention but also as a driver of economic growth and industrial competitiveness.

Keiji said, “JICA remains committed to supporting Nigeria’s efforts towards sustainable and inclusive energy development, and we hope this workshop will produce a practical roadmap to guide future investment and institutional collaboration.”

The economic cost of energy inefficiency was further highlighted by Director General/Chief Executive Officer of ECN, Dr. Mustapha Abdullahi, who disclosed that industrial energy expenditure in Nigeria ran into trillions of naira annually.

A significant portion of the expenditure, he said, went into diesel-powered self-generation, which he described as one of the most expensive and least efficient sources of energy available to Nigerian industries.

Abdullahi said the scale of spending meant that energy inefficiency was effectively diverting resources that could otherwise be deployed into production, expansion, employment and investment.

“Inefficiency in the energy chain is money leaving the productive economy for no productive return,” he said.

He said the workshop was intended to move the country beyond policy formulation by bringing policymakers, regulators, and implementers together to agree on specific actions and timelines.

“Energy efficiency policy that is not backed by clear standards, and standards not backed by institutions able to enforce them, do not change outcomes on the ground,” Abdullahi said.

Meanwhile, former Minister of Science and Technology, Professor Abubakar Sambo, identified another cost channel in the country’s energy-efficiency challenge—the continued inflow of inefficient appliances through the country’s porous borders.

Sambo said Nigeria lacked sufficient decentralised testing capacity to verify the energy ratings of appliances entering through its ports, creating an enforcement gap that could lock consumers and businesses into higher energy costs for years.

He called for a shift from voluntary compliance to mandatory, customs-enforced energy-efficiency standards at the point of entry.

He said, “We must integrate compliance between the Standards Organisation of Nigeria and the Nigeria Customs Service to flag high-energy intensity imports at the ports.”

According to him, improving efficiency could deliver additional energy capacity without requiring equivalent investment in new generation infrastructure.

“Efficiency is our cleanest, cheapest and most abundant energy source. It requires no new power plants, only the political will to enforce what is already on paper,” Sambo said.

Minister of Innovation, Science and Technology, Dr Kingsley Udeh, stressed the role of technology in reducing the country’s energy burden.

Udeh said smart energy systems, artificial intelligence, and digital monitoring tools were already transforming energy management globally and should be deployed more aggressively in Nigeria.

Represented by Director, Technology Acquisition and Adaptation, Michael Anpe, Udeh also called for stronger links between research institutions, universities, technology hubs and industries to ensure that innovations developed locally translated into commercial solutions.

He said, “We must move beyond research that remains on shelves towards innovations that solve real problems in Nigerian homes, offices, industries and communities.”

He stated that although Nigeria had made progress in developing energy-efficiency policies and institutional frameworks, their economic impact would depend on implementation, monitoring and enforcement.

Federal Ministry of Budget and Economic Planning also backed the initiative, with its representative, Fatima Sheji, describing energy as a cross-cutting input affecting infrastructure, education, industry, and wider economic development.

Sheji urged ECN to support the programme and ensure that its outcomes were implemented across the country.