Nigerian CSO denounces increase in energy tariffs linked to World Bank-backed reforms

17 September 2021

Nigerian civil society has opposed further proposed electricity price increases in the country linked to World Bank-backed energy reforms. In a 1 September interview with online news outlet Premium Times, Ene Obi, of  ActionAid Nigeria, noted that the planned increase will further erode the purchasing power of Nigerian workers and impoverish more Nigerians. She stressed that, “The increase in electricity tariff is not only ill-timed but insensitive to the precarious plight of Nigerians whose lean disposable incomes are already decapitated.”

The World Bank has been a key promoter of energy sector reform in Nigeria, with a $750 million Performance for Results (P4R) loan in 2020 linked to reforms of the sector (see Observer Autumn 2020). Despite measures to mitigate impacts on the poorest, the reforms have led to increased electricity prices for most Nigerians, amidst a deep economic crisis triggered by the Covid-19 pandemic.

A further $500 million financing package – consisting of a P4R loan, an investment loan, and technical assistance – was approved by the Bank’s board in February 2021. The package includes performance indicators for Nigeria’s electricity distribution companies (DISCOs) and its success measured according to improvements in percentage of metered customers, annual electricity billed and annual collection of billed electricity. The reform of the DISCOs is just one element of wider market-based reforms promoted by the Bank that have led to increased energy tariffs (see Observer Autumn 2020).

Power sector reforms have been consistently pursued by the World Bank and the IMF over recent decades, with uneven ‘success’, according to the Bank’s own research published in 2020.