‘Poor Energy Capacity Costs Nigeria N10tln Annually’, Says World Bank
The World Bank has said that the unreliable power supply in Nigeria is been causing the country huge, annual economic losses, which it estimated at N10.1 trillion.
In a new report, the World Bank said Nigeria’s attempt to transform its power to private sector led, which began in 2013, did not live up to expectations.
The report revealed that Nigerian power sector “is under severe stress,” it said, adding that the causes for the stress stared where stakeholders failed short of their expected contributions for achieving sector turnaround.
“This had led to a lack of trust between key stakeholders and among the general public with respect to power sector improvement.”
The report said the efforts to reduce the sizable public expenditures for tariff shortfalls would create critical fiscal space for the government to finance a pro-poor economic stimulus package to protect the poor and vulnerable from the crisis and to support the economy to recover.
World Bank stressed that a credible reform process would require an integrated approach of resolving regulatory and policy failures, and establishing a credible and fiscally sustainable financing plan by the Nigerian government to ensure full funding for tariff shortfalls, among other measures.
The global body made special notes of the distribution segment, describing it as “operationally inefficient with high losses,” stressing that power sector recovery is critical for the Federal Government of Nigeria’s response to the COVID-19 outbreak.
“The sector recovery efforts focused on ensuring regulatory and policy predictability providing incentives for efficiency in operations while enforcing payment discipline across the supply chain are critical for maintaining the ‘lights on’ through continued generation of electricity,” World Bank said.
It said during the recovery period, improving power sector performance would be central to unlocking economic growth, particularly in the non-oil sectors of manufacturing and services.
“The annual economic losses caused by Nigeria’s unreliable power supply have been estimated at N10.1 trillion or about two per cent of GDP” it said
Chibisi Ohakah, Abuja