🍞 Made in Aba

Hello,

At 12:40 pm on 19 October, Nigeria's grid lost nearly 90% of its output in a few hours. Abuja's answer is a bigger grid in two to three years. Aba found its own answer two decades ago, and it took 20 years, more than $900 million, and a city pledged as collateral to make it work. Here is how it was built, who paid for it, what it costs to switch on, and whether any other city can copy it.

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Enjoy!
Demilade

🏦 Stocks: It was a quiet retreat for Nigerian equities. Both the broad market and the big blue chips ended the week a little lower, with no single sell-off driving it. Tuesday showed where investors’ appetite has gone: the heavyweights kept slipping while smaller names did the lifting. Austin Laz, ABC Transport and Cutix all ran close to the daily ceiling. When small caps rally and large caps fade, traders are usually hunting for quick wins rather than making big bets on the market’s direction.

💱 Currencies: The naira had a rough week and lost ground to the dollar, the euro and the pound. The pound hurt most. That matters because it rules out the easy explanation: this wasn’t a strong dollar pushing everything around, since the euro and pound gained on the dollar too. This one was about the naira itself.

🛢️ Commodities: Oil kept climbing and now sits comfortably above $100 a barrel, despite a small pullback on Tuesday. On paper that is good news for Nigeria, because more oil money should mean more dollars and a steadier naira. That link didn’t hold this week, and the gap between strong oil prices and a weakening currency is worth watching.

On the morning of Monday, 19 October, Nigeria's power plants were sending about 3,840 megawatts (MW) into the national grid. At around 12:40pm, multiple lines on the 330kV transmission network tripped. By 1pm, output had fallen to 476.70MW, and the number of plants supplying the grid had dropped from 21 to two. Abuja and Ikeja's distribution companies put out notices. The Nigerian Independent System Operator (NISO) said it was a partial disturbance, not a collapse, and that the grid was restored the same afternoon.

This was the third big failure of the year, after total collapses on 23 and 27 January. After the second of those, Abia's governor, Alex Otti, explained why Aba had not gone dark while the rest of the country did.

Four days before the October trip, Power Minister Joseph Tegbe told an energy conference in Lagos that President Tinubu had approved new eastern and western grids. Procurement is starting. He says Nigerians should feel the benefit in two to three years.

Aba did not wait. A teacher in the city told reporters her household's monthly energy bill fell from about ₦600,000 on diesel to ₦75,000 once she switched to Aba Power. The 2,000-shop Aba North Shoe Plaza turned off its generators on 14 January. A polytechnic that used to send staff home at 2 pm now stays open into the evening, with energy costs down 80%.

So what does Aba have that Abuja, Lagos and Kano do not? Put simply, it went off the grid. One company owns everything from the gas pipelines to the meter on your wall. This is the story of how that came about, what it cost, who is still carrying the risk, and how hard it would be to do it again.

Aba was a Ngwa market town long before it was anyone's industrial hub. The British put a military post there in 1901, and in 1915 a railway linked it to Port Harcourt, turning Aba into a collection point for palm oil and palm kernels heading for the coast.

The city's most famous moment was about trade. In 1929, with palm produce prices collapsing and rumours that the colonial authorities would start taxing women, thousands of Igbo and Ibibio women marched on Aba in what the British called the Aba Riots, and the women called the Women's War. The warrant chief system that provoked them was abolished the following year.

In the Nigerian Civil War, Aba was a strategic Biafran city and was unfortunately heavily bombed. When the war ended in 1970, returning traders came back to wrecked shops and, under the federal government's policy, only £20 in the bank regardless of what they had saved before the war. A tragedy that Nigerians, government and citizens alike have yet to reckon with fully even today. 

What they built from that is the Aba most Nigerians know. In 1977, after repeated fires in the old Ahia Ohuru market, the building materials section moved to a community called Ariaria. Ariaria grew into one of the biggest markets east of the Niger. Around it grew the clusters: shoes, bags, garments, belts, each running on apprenticeship, where a young man serves a master for years and is then set up in his own stall.

We wrote about what that cluster became in our States and Capital deep dive. Aba makes a large share of the shoes sold in Nigeria and ships them across West and Central Africa, often without any label that says so. That piece was about a missing brand, but there is one more element required to make all those things come together; power. 

Run a shoe factory in Aba in 2010 and here is your morning. The grid supply arrives for a few hours, maybe. When it goes, the generator comes on. Diesel is your second-largest cost after leather. When diesel prices jump, you either raise prices and lose orders to Chinese imports, or you absorb it and lose margin.

Most could not do either for long. The number of industries operating in Aba fell from 165 in 2005 to fewer than 30 a decade later. Multinationals left over the same years. When Geometric first designed its plant, the waste steam from its turbines was meant to go to a Guinness brewery next door. Guinness has since left.

The informal clusters survived because they were small, flexible and cheap. But small, flexible and cheap is also why they never became big. You do not build a 2,000-worker factory on a generator.

The solution started with a visit. In March 2004, Finance Minister Ngozi Okonjo-Iweala and World Bank President James Wolfensohn toured Aba and asked the small manufacturers in Ariaria what held them back. The answer was power.

They took the problem to Barth Nnaji, a Nigerian manufacturing engineering professor who had spent years in the United States. Nnaji had just led a team of Nigerian engineers to build a 22MW emergency power station in Abuja in 2000 and 2001. It fed the Central Bank, NNPC, Aso Rock and the central business district through its own dedicated network.

Could the same thing work for a whole city? Perhaps it could, if they found financing. The problem was finance. In 2004, Nigerian banks barely lent to power, which was still a NEPA monopoly. Nobody would fund a power plant whose only customer was NEPA, an organisation that routinely failed to pay.

So the deal was built differently. On 11 May 2004, Nnaji's Geometric Power signed an agreement with the federal government. In April 2005, it signed a lease and concession with the government and NEPA. That gave its sister company, Aba Power, the exclusive right to distribute electricity in a ring-fenced area of Aba.

This is the clever part. Instead of a sovereign guarantee (a promise that the government will pay if the customer does not), Geometric got the customers themselves. The ring fence was the security. Lenders were not betting on NEPA paying its bills. They were betting on Aba's traders and factories paying theirs.

Think of it as a gated estate that owns its own borehole, its own generator and its own gateman. Residents pay the estate, not the water board. If the public supply fails, the estate does not notice.

Geometric started building in Osisioma, on the edge of Aba: turbines, substations, a gas pipeline. By the early 2010s the plant was nearly complete.

Then the federal government sold the estate to someone else.

In 2013, Nigeria privatised the successor companies of the Power Holding Company of Nigeria. Enugu Electricity Distribution Company went to Interstate Electrics, and the sale included the Aba and Ariaria business units, the very area already leased to Aba Power. Geometric said it had invested more than $700 million by then.

What followed was seven years of court cases, advertorials and stalled commissioning. The government itself later called the double sale an "administrative error". Geometric kept paying staff to maintain a plant that earned nothing. As Group Managing Director Agatha Nnaji puts it, for seven years they were simply maintaining the facilities.

In 2016, with Power Minister Babatunde Fashola witnessing, the parties signed an agreement carving the ring fence back out of Enugu DisCo, with Geometric repaying the bid fee. Signing it and finishing it were two different things. It took Afreximbank's money (more on that below) and a handover from the Bureau of Public Enterprises on 16 February 2022 before Aba Power formally became Nigeria's 12th electricity distribution company.

The early months were rough. Aba Power took over a network still fed mostly by the national grid, and only about 40% of customers were paying. In 2023, the grid's market operator cut the entire ring fence off from the grid over an ₦896 million debt, until Aba Power paid ₦120 million to be reconnected.

On 26 February 2024, Vice President Kashim Shettima, standing in for President Tinubu, commissioned the plant. It had taken two decades from the Wolfensohn visit.

The national grid is one machine. Gas plants in the south feed power into 330kV lines, which carry it hundreds of kilometres to substations, then on to 11 distribution companies, then to you. When one big line trips, the imbalance cascades. That is how 3,840MW can become 476MW before lunch.

Aba's machine is short and owned end to end:

The meters changed behaviour as much as the turbines did. Before metering, demand in Aba ran at about 90MW, much of it wasted on lights left on in empty houses. Now it averages 50 to 60MW, because people switch off when they go out, confident the power will be there when they get back. Reliable power turned out to be cheaper to supply than unreliable power.

The island is not perfect. In February 2025, Aba Power's chief operating officer said only about 45% of its feeders had 24-hour supply, with the rest still in Bands B to E. Some clusters, like the tailors, sit on dedicated feeders with daytime hours.

And the island's weakness is its single bridge to the mainland: the gas. In November 2025, a facility trip at Heirs Energies ended Aba's first 60-day run of unbroken supply. In August 2026, the failure of a clutch gear and starter motor at the gas gathering plant in Obigbo left the ring fence dark for days while a replacement part was flown in. When that happens, Aba Power falls back on the national grid, buying emergency power from the Niger Delta Power Holding Company (NDPHC).

So the gated estate still has a pipe to the public mains. It just rarely needs it. When the grid fails, Aba stays on. When the gas fails, Aba goes off. The risk has not disappeared. It has moved from the grid to the gas.

Nnaji says the whole project has cost more than $900 million, the largest single private investment in South-East Nigeria. Here is roughly where the money came from:

Geometric likes to say it never received a federal subsidy, and it is true that it has not received the tariff shortfall payments that keep the other 11 DisCos alive. But the federal state was in the room. AMCON is a federal debt vehicle. The Central Bank's power intervention fund, run through the Bank of Industry, lent into the project. And about 80% of Aba Power's meters came through the federal National Mass Metering Programme. Call it no subsidy on the bill, rather than no help at all.

Now a scale-maker. Nnaji says it costs $1 million to $1.3 million to build each megawatt of gas generation. Divide $900 million by 141MW and Aba cost about $6.4 million per installed megawatt. Some of that gap is the wires, substations, pipeline and meters a normal power plant does not need. Much of the rest is the price of 20 years of waiting.

What do customers pay to cover it? The answer is the uncomfortable part of the Aba story. Aba Power's tariffs are cost-reflective (set to recover the full cost of supply) across almost every band. From 1 January 2025, after a NERC review, Band A customers pay ₦219.70 to ₦241.45 per kilowatt hour, and Band C between about ₦145 and ₦205. Elsewhere in Nigeria, only Band A is cost-reflective, at about ₦209.50, while Bands B to E pay subsidised rates of around ₦50 to ₦63.

The trigger for that rise was the grid backup itself. NDPHC power that cost Aba Power ₦21/kWh under its 2022 agreement was being invoiced at ₦136.26/kWh by 2024. Its own plant's generation cost was ₦133.2/kWh.

So a trader in Aba on Band C may pay three or four times what a trader on Band C in Onitsha pays per unit. The difference is that the Aba trader has stopped buying diesel. The shoe plaza's president admits some traders find the tariff high, but says it beats what they used to spend on fuel.

A rough illustration of the business (not company figures): 55MW for every hour of the year is about 480 million kilowatt hours. At an average of about ₦210/kWh, that is roughly ₦100 billion ($75 million) of revenue a year, set against more than half a billion dollars of debt. This is a business that only works if customers pay full price and the gas keeps flowing.

Aba is unusual in Nigeria, but not in the world. Two cases make it legible.

Mumbai. India's grid has been notoriously unreliable, yet its financial capital has had dependable electricity for most of a century. Tata Power's first hydroelectric stations started feeding the city's textile mills in 1914. Since the late 1960s, Mumbai's utilities have been able to "island" the city: cut it off from the wider grid when the grid falters, and keep running on local generation. Mumbai's demand alone hit 3,382MW on one October day in 2018, close to everything Nigeria's grid was carrying on the morning of 19 October.

The lesson from Mumbai is that one city can be an island at scale. The warning is that someone pays for it: rural Maharashtra has long had planned load shedding while Mumbai stays lit.

The Copperbelt. In 1953, before Zambia's independence, a privately owned utility was set up to power the copper mines on the border with Congo. Today it is Copperbelt Energy Corporation, listed in Lusaka since 2008. It has stayed in business for 70 years for one reason: its customers are mines that lose millions for every hour without power, so they pay reliably for reliable supply.

The lesson from the Copperbelt is that an anchor customer who will pay full price is what makes private power bankable.

Aba sits between the two. It is city-scale like Mumbai, but at 1/60th of the size. And its anchor is Aba's industrial clusters, which play the role the mines play in Zambia, only spread across thousands of small factories instead of a handful of big ones.

None of this means Abuja's grid plan is wrong. Tegbe has clustered Nigeria into three energy zones, and says fixing the Lagos and Abuja corridors alone would solve more than half the country's problems. Alongside the new grids, there is a nationwide technical audit ("I don't want to fix transformer issues where I have conductor and relay problems," he said), and a new National Control Centre is being built in Osogbo.

The grid did hold steady for a stretch this year: NERC reported no system disturbance at all between April and June. But no cost has been published for the new grids, and two to three years is a long time in a country that recorded 12 grid failures in 2024 alone.

Think of the national grid as the motorway: essential, and only fixable by the federal government. Aba is a side road that one company built, tolls and all, so its traffic never has to touch the motorway.

What changed recently is who is allowed to build side roads. Under the Electricity Act 2023, which followed a constitutional change letting states legislate on electricity, a state can take over regulation of its own power market. Abia signed its Electricity Law in March 2025. NERC transferred oversight to the new Abia State Electricity Regulatory Authority (ASERA) from 25 June 2025, with a final order in December. Abia was the 10th state to do so.

States are already using the power. Enugu's regulator cut Band A tariffs from ₦209 to ₦160/kWh for the EEDC subsidiary operating there. ASERA has licensed NEWERA to distribute in the parts of Abia outside the ring fence, and Otti says the state is raising money to buy out EEDC's Umuahia assets.

But be precise about the role. Abia did not build Aba's island. It owns a 5% stake in the project, and it became the regulator more than a year after the plant switched on. States can now grant the franchise. They cannot conjure the gas or the capital.

Agatha Nnaji argues the model could work in Kaduna, Kano, Onitsha and Enugu, and that anyone following would "never go through one-tenth of what we have gone through". She says it could take two years from financial close to commissioning if the negotiations are right.

Here is what any city would need, in order of difficulty:

On that test, the best candidates are medium-sized southern cities with a manufacturing cluster and a gas line: Onitsha and Nnewi, the industrial areas around Port Harcourt, Warri. Aba is already selling surplus power into underserved parts of Rivers State, with the permission of Port Harcourt DisCo and the regulator.

The big cities are a different problem. Lagos does not need one island. It needs dozens, plus the motorway. That is why the federal grid still matters.

The bet, in one line: reliable power comes from owning the whole chain, and customers will pay full price to get it.

Geometric now wants to grow to as much as 500MW on the same site. It says its 12-inch pipeline can carry enough gas for that, and it is talking to Otti about the eight Abia LGAs outside the ring fence. If it works, Aba stops being an island and becomes a mainland of its own.

The risks are real and should not be buried:

When the grid tripped on 19 October, the question for most Nigerians was when the light would come back. Aba's answer, to the extent it has one, is that the light does not depend on the grid in the first place.

Watch: procurement and a price for the east and west grids; the fourth turbine and the 500MW plan; whether ASERA reviews Aba Power's tariffs; Heirs Energies' gas reliability; and the first city to try the model.

💱 Deutsche Bank thinks the naira has further to run

Deutsche Bank has added Nigeria to its frontier currency watchlist, alongside Angola and Ghana, and says the naira is undervalued. Its reasons are the policy rate of 23% sitting well above inflation, attractive returns for foreign investors, higher oil prices, easier access to dollars, and Nigeria’s return to FTSE Russell’s Frontier index on 21 September. The naira closed September at ₦1,329.50.

The bank’s main worry is government borrowing. “The principal risk to the outlook is from the fiscal side,” it said, pointing to heavy bond issuance and spending ahead of the 16 January presidential election.

Watch: the Debt Management Office’s bond calendar and year-end import demand, which could slow further gains.

The Federal Mortgage Bank of Nigeria approved more than ₦208 billion in housing loans in 2025, up from ₦71.5 billion in 2024 and ₦39.7 billion in 2023. It financed 6,911 homes, 96% of its target, and paid out over ₦120 billion. Contributions to the National Housing Fund (NHF) rose 48% to ₦152.4 billion.

It is also widening access. A new diaspora mortgage offers up to ₦100 million at 9% over 10 years, and a non-interest mortgage and rent support for federal workers are due by the end of October. Against a housing shortage measured in millions of homes, 6,911 is still a drop in the ocean.

Watch: whether approvals turn into disbursements; only just over ₦120 billion of the ₦208 billion went out.

Finance minister Taiwo Oyedele wants NNPC Ltd, Nigeria LNG and other “choice assets of government” listed, saying it would improve transparency and let Nigerians share in the wealth. His illustration: if NNPC were worth just 10% of Saudi Aramco’s $1.6 trillion, it would be worth about $160 billion. The entire Nigerian Exchange is worth roughly $122 billion.

He promised the government would clean up NNPC first. Its profit fell 35.4% to ₦2.28 trillion in the first half of 2026. NLNG is harder, because Shell, TotalEnergies and Eni own 51% of it.

Watch: a timeline. None was given for either listing.

🇲🇿 Mozambique rubies fetch $52 million as premium stones lead the sale
Gemfields sold $52 million of rough rubies from its Montepuez mine in northern Mozambique at an auction held from 5 to 16 October. Bidders from 46 companies bought 90 of the 99 lots, or 92,153 carats, at an average of $564.54 a carat. Adrian Banks, Gemfields’ managing director of product and sales, pointed to “particularly strong prices for larger, fine-quality rubies”. The total almost matches February’s $53 million, which took more than twice as many carats. That is partly because this sale had more premium stones, which bring in over 70% of the mine’s revenue from under 5% of the weight sold. The mine itself is struggling. The rate of premium rubies dug up per tonne of rock has more than halved since 2025, and the second processing plant has had faulty equipment and delays. Gemfields says more than 1,000 illegal miners enter the site every day. It wrote down the mine’s value by $125.2 million in September. Gemfields owns 75% of the mine and Mozambican partner Mwiriti owns 25%. Watch: the next ruby auction in December.

🇪🇹🇳🇬 Dangote plans to list 10% of his Ethiopian fertiliser business
Aliko Dangote says he will list at least 10% of his Gode fertiliser venture on the Ethiopian Securities Exchange once production is stable, “so that Ethiopians will have the right to buy shares”. He made the pledge in Addis Ababa while promoting his refinery IPO. Referring to Ethiopia’s prime minister, he added: “Even if he doesn’t agree, we will take our own 10 percent and sell.” The plant will make urea fertiliser, cost $2.5 billion and have the capacity to produce three million tonnes a year. Dangote Group owns 60% and the state investment fund, Ethiopian Investment Holdings, owns 40%. The plant will have 140MW of its own power and run on gas piped from the Hilal and Calub fields, with completion targeted within 40 months. No date, share count or price has been set. The pledge comes as Ethiopia limits local buyers of the refinery IPO to at most 100 qualified investors, each with assets of at least 10 million birr. Watch: whether ordinary Ethiopian investors will be able to buy into the fertiliser listing.

🇿🇦 Ramaphosa looks to China and India as US ties sour
South Africa is looking for new export markets in case it loses its preferential access to the US. President Cyril Ramaphosa said on Monday that he and his deputy have been travelling “around the world to see where we can open up markets”. South Africa benefits more than any other country from the US African Growth and Opportunity Act (Agoa), which lets eligible African countries sell goods into the US duty-free. Agoa runs until 2028, but relations with Washington have soured badly under President Donald Trump. Ramaphosa said losing access could be “devastating” for jobs in a country where one in three people is unemployed. He pointed to China, whose zero-tariff scheme for African imports began in May; South African apples and wine were among the first products shipped under it. He also pointed to India, where talks on a trade deal restarted this year after a decade of deadlock. Moving to new markets won’t be easy for wine and car exporters whose supply chains are built around the US. Watch: whether Congress pushes ahead with a formal review that could remove South Africa from Agoa before 2028.