Businesses lose $29 billion yearly to poor electricity, says World Bank

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The World Bank has stated that businesses in Nigeria suffer an annual loss of $29 billion as a result of an “unreliable” power supply, saying the situation has resulted in the refusal of consumers to pay their bills.



Top officials of the bank said this at ‘World Bank Dialogue on Fostering Knowledge-Sharing and Dialogue on Power Sector Issues in Nigeria’.

Presenting the bank’s Power Sector Recovery Programme (PSRP) fact sheet, World Bank’s practice manager, West and Central Africa Energy, Ashish Khanna, said the majority of Nigerians are reluctant to pay for electricity because the bills are not “transparent and clear.

Businesses in Nigeria lose about $29 billion annually because of unreliable electricity. Nigerian utilities get paid for only a half of electricity they receive,” the report read.

It added that for every N10 worth of electricity received by electricity distribution companies (DisCos), about N2.6 is lost to poor distribution infrastructure and through power theft while another N3.4 is not paid for.

“Six in 10 of registered customers are not metered, and their electricity bills are not transparent and clear. This contributes to resistance to pay electricity bills.”

The Bretton Woods institution noted that only 51 per cent of installed capacity was available for generation, as an average Nigerian consumed four times less energy than his/her counterpart in a typical lower middle-income country.

However, it said every Nigerian paid less for electricity than what it costs to supply electricity to them.

According to the report, for years, the government has been paying the difference because the government wanted to help poor Nigerian families to pay their bills.

“But richer families use more electricity; so a big chunk of government support ends up going to those who do not need help with paying bills,” the report added.

The bank said every one in 10 people without access to electricity resides in Nigeria.

Muhammad Wakil, senior energy specialist, World Bank, said: “Nigeria now has the largest number of ‘un-electrified people globally and the trend is worsening. Of the electrified, the supply is very unreliable with widespread blackouts.”

He said Nigeria now has 25 per cent more ‘un-electrified people than the second most un-electrified country in the world, the Democratic Republic of Congo (DRC).

The World Bank described the PSRP as a comprehensive response to Nigeria’s power challenges to renew the country’s economy by rebuilding a functioning and fair power sector.

Between June 2020 and February 2021, the World Bank said its board approved $1.25 billion funding to support the Nigerian government in its efforts to reset the power sector.

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