In Nigeria, the ongoing struggle with insufficient electricity supply has reached a new peak this year, especially as the country faces intense heatwaves. The lack of power has led to increased complaints among Nigerians who find themselves unable to use cooling systems at home, further exacerbating the challenges faced by businesses due to electricity shortages. In a recent development, the European Union (EU) announced a commitment to invest €37 million in Nigeria’s electricity sector, aiming to tackle the persistent issues of power inadequacy. This announcement was made by Bolaji Tunji, the Special Adviser on Strategic Communication and Media Relations to the Minister of Power, Adebayo Adelabu, on February 16, 2024.
Despite Nigeria’s power sector having an installed capacity of 13,000 megawatts (MW) after its privatization eight years ago, the country still suffers from significantly low power generation, which barely reaches 4,000MW. This situation is attributed to various challenges, including the underuse of power plants and widespread inefficiencies within the system. The EU’s recent financial pledge adds to the approximately €200 million that has already been invested in the sector since 2008. The pledge was made following discussions between the EU Ambassador to Nigeria, Samuela Isopi, and Minister Adelabu, focusing on different intervention programs.
These programs include small hydropower projects, solar power installations for healthcare facilities, rural electrification through mini-grid systems, and efforts to promote a circular economy in the power sector. Ambassador Isopi also invited Minister Adelabu to the launch of EU-funded projects in partnership with the United Nations Industrial Development Organization (UNIDO), highlighting the EU’s dedication to improving Nigeria’s electricity infrastructure. In response, Minister Adelabu expressed his appreciation for the EU’s support and acknowledged the significant challenges that remain in the power sector, citing liquidity issues and the need for a cost-reflective tariff as major obstacles. He emphasized the importance of ongoing collaboration and additional support. Nigeria’s severe power shortage has been a critical barrier to its economic growth, with the World Bank estimating annual losses for businesses at $29 billion. Additionally, the Energy Progress Report 2022 indicated that nearly half of the Nigerian population, about 92 million people, lack access to electricity.
The EU’s investment, especially in renewable energy, is a noteworthy step towards addressing climate change and the energy crisis in Nigeria. However, there is widespread skepticism by Nigerians about the impact of this investment due to past failures and mismanagement in the power sector. Over the last eight years, more than 1.7 trillion naira has been spent on the power sector without achieving a stable electricity supply.
Recent attempts by the Nigerian government to blame the power crisis on gas supply shortages have also been met with skepticism. While the EU’s investment represents a hopeful step forward, there remain concerns about the effectiveness of such initiatives given Nigeria’s history of power sector mismanagement. Despite this, there is a collective hope for tangible improvements, with stakeholders stressing the need for transparency, accountability, and effective project implementation as essential for harnessing the full potential of foreign investments in Nigeria’s power infrastructure.
