- World Bank demands enhanced accountability in disbursement of its $750 million loans to Nigerian power sector
The World Bank has declared that Nigeria has lost $28 billion to power epilepsy rocking the country.
The apex bank, which stated this in a document in which it demanded accountability on $750 million loan it approved for Nigeria’s power sector, maintained that what the country lost to inability to fix power problem was equivalent to two per cent of its Gross Domestic Product (GDP).
“The economic cost of power shortages in Nigeria is estimated at around $28 billion, which is equivalent to two per cent of its Gross Domestic Product (GDP),” the World Bank said.
Getting access to electricity, it said, was one of the major constraints for the private sector according to the Ease of Doing Business report.
It reiterated approval of a $750 million International Development Association (IDA) credit for Nigeria’s Power Sector Recovery Operation (PSRO), noting that the loan was to improve electricity supply. The bank, in a statement in Abuja, said that the target was to also achieve financial and fiscal sustainability and enhance accountability in Nigeria’s power sector. It explained that about 47 per cent of Nigerians did not have access to grid electricity and those who had access, faced regular power cuts.
According to the bank, improving power sector performance, particularly in the non-oil sectors of manufacturing and services would be central to unlocking economic growth post-COVID-19.
The statement quoted Shubham Chaudhuri, World Bank Country Director for Nigeria, as saying “lack of reliable power has stifled economic activity and private investment and job creation. ”This is ultimately what is needed to lift 100 million Nigerians out of poverty.
“The objective of this operation is to help turn around the power sector and set it on a fiscally sustainable path. This is particularly urgent at a time when the government needs all the fiscal resources it can marshal to help protect lives and livelihoods amid the COVID- 19.”
The bank said that PSRO would provide result-based financing to support the implementation of the Government’s Power Sector Recovery Programme (PSRP). It further explained that the PSRP was a comprehensive programme to restore the power sector’s financial viability, improve service delivery and reduce its fiscal burden.
“The PSRO is expected to increase annual electricity supplied to the distribution grid, enhance power sector financial viability while reducing annual tariff shortfalls and protecting the poor from the impact of tariff adjustments.