Civil society organizations and power consumer groups have voiced apprehension over the allocation of N618 billion in multilateral and bilateral loans to the Ministries of Finance and Power in the 2024 budget. While labeled as project-tied loans from international funding agencies, groups such as the Nigeria Electricity Consumer Advocacy Network and Civil Society Legislative Advocacy Centre expressed discontent with the continued borrowing trend of the Federal Government.
Critics argue that despite the substantial financial investments made by both the government and private investors in the power sector over the past decade since privatization, there has been little improvement in the nation’s power supply. The 2024 budget reveals that 13 federal ministries are slated to receive N1.1 trillion as project-tied loans sourced from agreements with global funding agencies like the World Bank, International Monetary Fund, and Africa Development Bank.
The Ministry of Finance is set to receive N353.94 billion, while the Ministry of Power is allocated N264.26 billion, bringing their combined share of the loan to N618.2 billion. This combined allocation surpasses the total allocated to the remaining 11 ministries set to receive loans. Notable among them are the Ministry of Works with N94.8 billion, Ministry of Education with N63.2 billion, and the Federal Capital Territory Administration with N48.2 billion.
A project-tied loan, as explained, is a specific grant intended for use on designated projects or activities. In this case, the funds are associated with contractual agreements with international funding agencies.
Power consumer groups express bewilderment over the government’s continued reliance on loans to fund the power sector, especially given the lack of discernible positive outcomes despite significant past investments. Critics emphasize the need for more transparency in fund allocation and the implementation of projects to ensure tangible benefits for the nation and its citizens.
