he World Bank has approved of $750 million for the Power Sector Recovery Programme (PSRP) through the International Development Association (IDA).1 The disbursement plan to commence in 2021 is as follows: $426 million in 2021 and $162 million in 2022 and 2023, respectively, summing up to $750 million. The recovery plan being set up is to enable Nigeria achieve a more reliable electricity supply and improve the accountability of the power sector. Presently, approximately 47 percent of the population do not have access to national grid electricity. The population that has access are subjected to frequent power outages, a major constraint that costs the Nigerian economy around $28 billion, annually – equivalent to 2 percent of the GDP. Furthermore, the aim of the PSRP is to make Nigeria a more financially sustainable nation and it will achieve this by increasing the annual electricity supplied to the national grid by 4,500 MWh/hour by 2022. Aside improving service delivery, the additional liquidity will strengthen the balance sheet of distribution companies and enhance their ability to attract private finance. Furthermore, the government will be better positioned to utilize the resources previously used to bail out the power sector for other development spending.
October 27, 2020
Nigeria Economic Update (Issue 38)
Nigeria Economic Update (Issue 9)
The naira depreciated by 8.2 percent from N305/$ on February 5th, to N330/ $ on February 12th 20166. The apex body identified the increased domestic demand for forex to pay for foreign medical treatments and schools fees (15 percent of total demand) 7 as the main drivers. As a result, the apex bank is considering to discontinue the provision of forex for payment of medical bills and school fees abroad and to re-channel the forex towards the manufacturing sector of the economy. With the continuous depreciation of the naira, and the CBNs resistance from calls to devalue the currency, the options for alternatives measures seem to be diminishing.