Nigeria to Invest N198bn on Power Generation in 2021

Published by

Abimbola Agboluaje

Nigeria, ‘the giant of Africa’ has been classified as the leader of 20 top Countries with the largest ‘Electricity Access Deficit

The Nigerian government would invest a total of N198.28bn on various capital projects in the power sector in different parts of the country in 2021.
Details of the 2021 budget proposal submitted by President Muhammadu Buhari recently showed that different sectors in the power industry have been mapped out to partake in the funds.
The Federal Ministry of Power will make the largest input as it targets to invest N173.78bn on capital projects during the period.

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Similarly, the National rural electrification project, managed by the Rural Electrification Agency, will invest a total of N17.86bn on power infrastructure development in rural communities across Nigeria.
The Nigerian Electricity Regulatory Commission on its part plans to invest N294.1m on capital projects. In the same vein, projects to be handled by the Nigerian Electricity Management Services Agency will gulp N441.1m.
For the Transmission Company of Nigeria, the sum of N4.69bn will be allocated for power generation.
Also, the capital outlay projected for 2021 by the Nigeria Electricity Liability Management Limited is N914.87m, while the National Power Training Institute would invest N294.1m.
The total overhead for the entire ministry and its agencies was N1.16bn.

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IN CONTEXT

For decades, Nigeria has made efforts to address its electricity woes, often considered fundamental to its economic challenges.

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The economic cost of power shortages in Nigeria is estimated at around $29 billion. The figure is equivalent to two per cent of Nigeria’s Gross Domestic Product (GDP). According to the World Bank, about 47 per cent of Nigerians do not have access to grid electricity and those who do have access, face regular power cuts.
Poor power supply stifles the growth of MSMEs and affects the operating costs of big industries.
Nigerian Electricity Supply Industry (NESI) data sets revealed that Nigeria boasts of 7500 megawatts (MW) of available electricity generation, with an installed capacity of about 13,000MW. The transmission wheeling capacity is estimated to be about 5000MW but due to technical constraints, distribution to homes and businesses is less than the figure.

Abimbola Agboluaje

Abimbola is the Managing Director of WNT Capitas, specializing in consulting on strategic communications, investment risk analysis, and policy reform. He holds a PhD from the University of Cambridge, where his dissertation focused on development aid conditionality.