Electricity Shortages in Nigeria Strain Businesses and Public Services, Impact Millions

Photo : AP

Millions of schoolchildren in Nigeria experience daily struggles in dimly lit and stuffy classrooms, where sunlight filtering through wooden windows provides the only illumination. These conditions, reflective of broader electricity shortages in the country, profoundly impact educational outcomes and daily life.

In places like Excellent Moral School in Olodo Okin, Ibadan, founder Muyideen Raji laments that neither the school nor the community it serves is connected to the national electricity grid. This lack of connectivity severely hampers educational opportunities, preventing students from accessing computer and internet resources and limiting study time to daylight hours.

Nigeria, with a population exceeding 200 million, faces significant challenges in providing reliable electricity to its citizens. Approximately half of the population connected to the grid experiences inadequate daily supply, while many rural and impoverished communities, like Olodo Okin, remain entirely off-grid.

Despite Nigeria's abundant solar potential, efforts to harness solar energy for widespread electricity generation face considerable hurdles. High interest rates on loans, averaging around 15%, deter investment in large-scale solar projects essential for meeting national energy demands. Comparatively, interest rates in advanced economies and China are significantly lower, complicating financial viability in Nigeria.

Najim Animashaun, director of Nova Power, underscores the disparity, noting that financing costs for Nigerian projects far exceed those in more developed nations, despite Nigeria's potential to generate surplus electricity from solar sources.

The Nigerian government's failure to implement cost-reflective tariffs further exacerbates financial instability within the electricity sector. Power producers currently contend with substantial outstanding debts from the government, totaling 3.7 trillion Naira ($2.7 billion), impairing their ability to meet financial obligations and discouraging private sector investment.

While World Bank guarantees could mitigate investor concerns and facilitate solar project development, government apprehensions about financial liabilities impede progress. Edu Okeke, managing director of Azura Power, stresses that without such guarantees, investor confidence in government subsidies for energy projects remains uncertain.

With less than 8,000 megawatts of installed capacity and frequent outages, Nigeria struggles to meet its energy demands. Communities like Olodo Okin, lacking grid access, rely on private diesel generators for electricity, further straining limited financial resources. The recent removal of long-standing petroleum subsidies has exacerbated costs for businesses, hospitals, and schools reliant on generator power.

Businesses, like Ebunola Akinwale's Nature's Treat Cafe, face substantial monthly expenses exceeding 2.5 million Naira ($1,700) to power generators across multiple branches. Akinwale, considering a transition to solar energy, underscores the potential cost savings and environmental benefits but acknowledges the financial barriers for many businesses and households.

Despite these challenges, stakeholders advocate for policy reforms to incentivize solar adoption and improve energy access. Suggestions include tax incentives, flexible payment plans, and policies supporting smaller-scale solar installations at community and household levels. These measures could leverage Nigeria's abundant solar resources to enhance energy security and economic development.

Sam Amadi, former regulatory chief, stresses the urgent need for affordable energy solutions tailored to local economic realities. He emphasizes the life-threatening consequences of power outages, recounting incidents where critical medical procedures were disrupted due to electricity failures.

In navigating Nigeria's energy crisis, stakeholders seek sustainable solutions that balance economic feasibility with environmental stewardship, ensuring equitable energy access and fostering national development.

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