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The World Bank Board has approved $750 million facility for the Nigerian Power Sector in a bid to support the Buhari administration in providing constant power supply to Nigerians.
The facility under the Bank’s The Power Sector Recovery Programme (PSRP) buys time in favor of the Nigerian consumers as it forestalls the increase of tariffs especially for the lowest rungs of the consumers and imposes an obligation on DISCOS to step up their service delivery including issues of metering.
The World Bank Board has approved $750 million facility for the Nigerian Power Sector in a bid to support the Buhari administration in providing constant power supply to Nigerians.
Membership of the group comprises the representative of the National Economic Council, NEC and the Nigeria Governors’ Forum, Governor Nasir El Rufai of Kaduna, the Minister of Power, Mr Saleh Mamman; the Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed; Central Bank of Nigeria Governor, Mr Godwin Emefiele; and Special Adviser to the President on Infrastructure, Ahmad Zakari, who is the secretary of the group.
Other innovative reforms to protect the consumers and improve accountability include the Service Reflective Tariff that is coming into effect on July 1st that prevents consumers from having Tariff increases by the DISCOs without a commiserate improvement in service quality and supply. Tariffs for the poor and those with low quality of service will be frozen.
The funds from the World Bank will allow for continued subsidy for the poor, moving away from the current situation where 60% of the subsidy is enjoyed by the top 20% of the population at the expense of the poor. It is expected that the top 20% will pay more in this new approach. The Federal Government of Nigeria is still planning on spending N380 billion this year on tariff subsidy mainly targeted at the poor.
The approval of the $750 million PSRP facility by the World Bank represents significant progress and a confirmation from the Development Finance community that the administration’s plan for the sector is moving in an acceptable direction
