- Power sector reforms crucial for economic growth, World Bank says
- 43% of Nigerians without electricity access
- ATC&C losses more than 50%
The World Bank has said, to drive economic growth, Nigeria must reform the power sector. In a country update report titled ‘Resilience through Reforms‘, the World Bank stated that 43% of Nigerians do not have access to electricity supply which is a key factor for economic growth. ”An estimated 43 per cent of Nigeria’s population (85 million people) lack access to an electricity grid—the largest energy-access deficit in the world. Privatization efforts have not delivered their intended outcomes, and the power sector is now under severe stress”, the report stated.
According to the report, the Aggregate Technical, Commercial, and Commercial (ATC&C) losses are three times higher than 15%, which is the international standard for the electricity sector. Such high ATC&C loss figures drive up the risks of investing in the sector. ”Distribution companies report aggregate technical, commercial, and collection losses of about 50 per cent, far above the 15 per cent benchmark for international good practice”, the report continued.
The report added that a combination of several negative indices might threaten the reforms in the sector, which will negatively impact economic growth in the country. The World Bank urged to government to make impactful decisions on reform to strengthen the electricity sector. ”Lack of reliable power stifles economic activity; in Nigeria, annual economic losses from lack of reliable power are estimated at 5 to 7 per cent of GDP at the cost of US$25 billion” the report noted.
”There is now a need to deepen these actions through a combination of financial and policy interventions upstream and technical, operational, and investment interventions downstream” the World Bank stated.