Nigeria’s Electricity Shortage Strains Businesses and Services

In many Nigerian schools, classrooms are dim and stuffy with sunlight being the only source of light. This is the reality for many students in Nigeria, where many buildings lack access to the national electricity grid. Excellent Moral School in Olodo Okin, Ibadan, is one such example. Founder Muyideen Raji noted that the lack of electricity affects students’ ability to learn about computers and study in the evenings.

About half of Nigeria’s over 200 million people are connected to a national grid that cannot provide enough electricity daily. Many rural communities like Olodo Okin are entirely off the grid. Despite Nigeria’s abundant sunshine, securing investment for major solar projects is challenging, leaving millions without reliable electricity.

Studies show Nigeria could generate more electricity than needed from solar energy. However, 14 solar projects in the northern and central regions, capable of generating 1,125 megawatts, have stalled since 2016. High interest rates, up to 15%, deter investors, making solar projects in Nigeria costlier than in developed nations.

Nigeria’s electricity prices do not cover production and distribution costs, causing distribution companies to rely on government subsidies. This deters lenders from investing. Power producers are owed up to 3.7 trillion Naira ($2.7 billion) by the government, complicating their financial obligations.

One solution is obtaining World Bank guarantees to reassure investors, but the government fears liability if electricity isn’t delivered due to inadequate infrastructure. Without such guarantees, investors remain wary. Edu Okeke of Azura Power emphasized the need for these guarantees for investment.

With less than 8,000 megawatts of capacity and an average supply below 4,000 megawatts, power outages are common in Nigeria. Communities like Excellent Moral School rely on costly generators due to frequent outages. The recent removal of petroleum subsidies has further strained households, schools, hospitals, and businesses struggling with fuel costs for generators.

Abdulhakeem Adedoja, head of Lorat Nursery and Primary School in Ibadan, noted that even grid-connected areas can be without power for weeks. This affects students’ ability to learn and complete homework. Small businesses also suffer, with high generator costs hindering growth.

Nigeria’s power minister, Adebayo Adelabu, stressed that electricity prices must reflect service costs to attract private investment. Though resisted, some business owners see grid electricity as cheaper and cleaner than generator fuel. To encourage private solar adoption, the government could offer incentives like tax relief and payment plans.

Without these measures, Nigeria’s frequent blackouts will continue to have severe consequences, such as lives lost in hospitals due to power outages.

Re-reported from the article originally published in FIRSTPOST.