The World Bank has emphasized the urgent need for Nigeria to enhance its electricity supply to facilitate the industrialization of its economy. Ndame Diop, the World Bank’s country director for Nigeria, made this assertion during an interview with Arise TV on the sidelines of the IMF/World Bank Annual Meetings in Washington, D.C.
Diop highlighted that inadequate electricity supply poses a significant constraint on human capital development and overall economic growth. He noted, “The Nigerian economy will not reach its growth potential without improvements in electricity supply.” He stressed that for firms, especially smaller ones, high electricity costs could diminish profit margins and hinder productivity.
To address these challenges, Diop called for an energy mix strategy and emphasized the importance of reforms within the power sector. “It is absolutely critical to implement well-known reforms, and the World Bank supports these initiatives,” he said, advocating for the financial viability of distribution companies and investments in metering to enhance billing and collection efficiency.
IMF Calls for Timely Social Protection Measures
In a related context, the International Monetary Fund (IMF) expressed concerns over Nigeria’s slow implementation of social measures designed to mitigate the effects of recent economic reforms, including petrol subsidy removal and foreign exchange rate unification. Abebe Aemro Selassie, director of the IMF’s African Department, acknowledged the significant internal adjustment costs that accompany these reforms, urging the government to expedite social protection initiatives for vulnerable populations.
Selassie noted, “The immediate effects of reforms often lead to dislocation, and conditions are extremely difficult for many Nigerians, with food price shocks and rising fuel costs exacerbating the situation.”
Central Bank Targets $1 Billion in Monthly Remittances
Meanwhile, Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), reported a surge in diaspora remittances, which rose from $250 million in April 2024 to $600 million by September 2024. He expressed optimism that ongoing engagement with the diaspora, combined with enhanced banking products, could increase monthly remittance inflows to $1 billion.
Additionally, Cardoso mentioned ongoing consultations aimed at removing Nigeria from the Financial Action Task Force (FATF) grey list, which categorizes the country due to concerns over capital inflows and deficiencies in combating money laundering and terrorism financing.
“Our discussions at the highest levels are focused on this issue, and we are committed to addressing the challenges that led to Nigeria’s greylisting,” Cardoso stated.
As Nigeria navigates these economic challenges, the focus remains on fostering a reliable energy supply, implementing timely social measures, and enhancing remittance flows to stabilize and grow the economy.