Nigeria’s electricity generation remains stagnant at an average of 4,500 megawatts despite receiving over $3.23 billion in loans from global financial institutions like the World Bank, African Development Bank (AfDB), and Japan International Cooperation Agency (JICA) over the last four years. Many Nigerians continue to endure power outages, raising concerns about the effectiveness of these funds.
These loans were designed to improve the power sector through various initiatives. For instance, the World Bank provided $500 million in September 2024 under the Sustainable Power and Irrigation for Nigeria Project to enhance energy reliability and agricultural productivity. Similarly, the Nigeria Distributed Access through Renewable Energy Scale-up Project received $750 million in 2023 to expand renewable energy access.
However, these efforts have not translated into significant progress. Peak power generation on Thursday reached 4,743MW, yet the average generation remains at 4,500MW for a population exceeding 200 million. Frequent grid collapses—12 recorded in 2024 alone—further exacerbate the problem.
Challenges in Implementation
Several obstacles have hindered the effective use of funds. For example, the $500 million Nigeria Distribution Sector Recovery Programme (DISREP) faced delays due to a court case involving the Association of Meter Manufacturers of Nigeria and slow approval processes in the National Assembly. This program was intended to address issues in electricity distribution, including metering gaps and infrastructure rehabilitation.
Power expert Mr. Chinedu Amah criticized the government’s approach, questioning why it continues to invest borrowed funds in a sector that has been privatized. “Does the Federal Government borrow money to improve the telecommunications sector or automobile companies? Why are they doing so for power?” he asked during a phone interview. He also called for audits to ensure borrowed funds are spent judiciously, stating, “If Nigerians don’t see the light at home, the loans have no value.”
The President of the Nigeria Consumer Protection Network, Kunle Olubiyo, echoed similar concerns. He pointed out systemic issues, such as poorly conceptualized projects that fail to meet current energy demands. “Globally, projects are designed to meet objectives, but in Nigeria, many are aimed at pilfering public funds,” Olubiyo alleged.
Also Read:
- Nigerian Breweries and Universities Secure Permits to Generate Electricity
- Court Orders Nigerian Banks to Blacklist Nduka Obaigbena Over $718 Million Debt to First Bank
Government’s Promises and New Initiatives
Despite these challenges, the government remains optimistic. Minister of Power Adelabu Adebayo has pledged to increase power supply and achieve incremental improvements. He promised to add 1,200MW to the grid in 2024, targeting 6,000MW, but these goals remain unmet.
The government is now exploring renewable energy as part of its energy mix, with plans to provide Nigerians with at least 20 hours of electricity daily by 2027. Additionally, it is working to decentralize the power supply and attract private investment through the Nigeria Energy Transition Plan and the new Electricity Act.
However, stakeholders have emphasized the need for accountability and transparency in managing resources. “Borrowing isn’t the issue; it’s about spending wisely and ensuring the funds lead to value,” said Amah.
Persistent Power Woes
Nigeria’s installed capacity of approximately 12,500MW starkly contrasts with its actual generation of around 4,500MW. This gap has left businesses struggling, with erratic electricity supply stifling productivity. The country’s reliance on ageing infrastructure, lack of maintenance, and frequent vandalism of critical facilities further compounds the issue.
As Nigeria continues to borrow funds for its power sector, citizens await tangible improvements. Until then, many will continue to endure unreliable electricity, questioning the true value of these multi-billion-dollar investments.