Feature/OPED
DISCOS and the Case for an Encore for Fashola
By Segun Odunuyi
Way back in the 60’s and 70’s in Lagos, Discos – short for Discotheques- were the places to be on Friday nights when the weekend spell of fun and entertainment took off in earnest. At the Disco parties and clubs, you really let off steam, gyrating wildly to the heavy bass and percussive beats of recorded pop music.
Fast forward to here and now in Lagos. The word “Discos”, to the average Lagos resident, now evokes anything but fun. Rather, it evokes the terrifying image of the bogeyman from the Power Distribution Companies (DisCos), who arrives at your homes monthly with his package of “double jeopardy” in the forms of electricity bills for energy you have most probably not used – called estimated billing – and an unending reluctance or incapacity to provide you with meters -or “pre-paid meters” in popular parlance- which, at least, enables consumers to pay for the quantum of energy consumed.
Clearly, drawing from the drift of the national conversation on the performance of the power sector, the Discos have been and remain the weakest link in the power value chain. In a recent interview, Usman Mohammed, the Managing Director/Chief Executive of Transmission Company of Nigeria (TCN) declared that “we cannot have a stable grid (electricity) unless we have an adequate investment on the distribution side and that is why TCN has been calling on the Discos to be recapitalized.” The TCN, like the Discos, is a creation of the unbundling of the former Power Holding Company of Nigeria (PHCN) in 2011 under the 2005 Electric Sector Power Reform Act, which privatized the nation’s power assets.
When he emerged on the power scene in November 2015 as the Minister of the three-in-one Ministry of Power, Works and Housing, which constituted about 80 percent of the basic physical infrastructure on which hopes for the revival of the then comatose economy rested, Mr Babatunde Raji Fashola was still basking in the public adulation of his exceptional performance as Executive Governor of Lagos State. His appointment by President Muhammadu Buhari to oversee such a “super-portfolio” elicited vehement protests from some quarters but Mr President knew that he had hit on the man to oversee the revival of physical infrastructure to drive the resuscitation of the economy.
From the 2005 Act and the subsequent unbundling also emerged entities like the National Electricity Regulatory Commission (NERC), the all-powerful regulator and licensor, and the Power Generation Companies (Gencos) who buys gas from the gas companies to produce power and sells to the Discos who rely on the TCN to get the power to their substations and distribute to homes and factories in their allocated distribution areas.
The “sin” of the Discos, then and now, is that they have never been able to fully evacuate the power load generated by the Gencos. The result is that there is a perpetual gap between power demand and supply and hence the power outages. The irony is that, contrary to popular impression in the media and among energy consumers, Fashola does not supervise the Discos. They were not licensed by his ministry but by the NERC which does not report to the Minister. So, Fashola, cannot, for example, withdraw the licence of a non-performing Disco or alter the terms or scope of operations of such licensee. That apparent absurdity in supervision was a product of privatization. Still, the minister had to navigate his way around such limitations and others to deliver on his agenda for profound and enduring change in the sector.
And, going by the incredible strides and achievements he has demonstrably notched up in just there and a half year to fast-track infrastructural development in Nigeria, Fashola’s performance has been top-drawer. But as he has stated often, the journey he had patriotically and passionately embarked upon was a “marathon and not a sprint”. Clearly, there is still a lot to do and accomplish if the Buhari government must equal or even surpass the spirited and enduring physical infrastructure development feats of the General Yakubu Gowon regime in the late 60s and 70s. Fashola undoubtedly deserves an encore on the second term Cabinet of the Buhari Administration, to reach a greater distance in the “marathon” especially in the power and works sectors.
It had not been easy, though, for the man once dubbed “the Actualizer” when he was at the helm of affairs in Lagos State. Indeed, Fashola must have been jolted by what he inherited in the power, works and housing sectors: structural rigidities, convoluted supervisory arrangements and crippling underfunding amidst huge liabilities to contractors, amongst the many unenviable legacies of the long and mindless neglect of the country’s primary and secondary infrastructures. But he also had a free hand from Mr President as well as his own his vision and rare capacity to understand, dissect and proffer solutions to knotty issues; his legendary fervour for long and hard work and, of course, a number of able lieutenants. He was not about to fail on his set deliverables.
Take the power sector. Fashola knew he had to, literarily, “crack the DNA” of the seemingly intractable power sector, which is the livewire of industry, by introducing fresh ideas. He did not take long to arrive at his eureka moment, and he set out to deliver to the following goals: increasing power generation from the 4,000 MW the administration met at inception, to a peak of 7,000 mw, in order to achieve “Incremental Power” -as the first visible and practical results of new initiatives; ending the mind-budgetary under-provisioning in order to get abandoned projects back on track and to execute new power projects , and improved interface with power stakeholders and consumers to secure the critical buy-in for the ministry’s road map . After three and half years in office, Fashola and his ministry have delivered satisfactorily on all these power sector goals.
Under Fashola’s watch, the initiatives which have driven the “Incremental Power” phase of his ministry’s road map include the promotion of off-grid connections and licensing of private Meter Asset Providers (MAP). The result is that, nine universities in the country will have 24-hour supply by the end of the year while major markets across the country, including Ariaria, Sabon Gari, Sura, Iponri and a couple of others in Ondo and Ibadan now have reliable power supply from the off-grid model. Twelve private meter providers have also been licensed to roll out from May 1, 2019 nationwide in a move that will help assuage vociferous and unending consumer protests against the present regime of estimated billing by the Discos.
Budgetary allocations from 2015 till date have also reflected the administration’s success in breaking from the mold of the past, when promises to bridge the nation’s gaping infrastructure deficits were mere political statements totally unmatched by financial provisions and commitments. In 2015 the total budget for the Power ministry was a N9.06 billion with about 50 percent or N4.47 billion earmarked for salaries and other recurrent expenses, leaving a paltry N5.13 billion left for capital expenditure. That sum could barely fund 22 out of the 142 outstanding transmission projects valued at N40 billion which Fashola met on ground.
Such budget under-provisioning was, indeed, the fate of the ministries saddled with infrastructure development, a recipe for abandoned projects and worsening of the infrastructure deficit. The Muhammadu Buhari administration halted the trend. From its very first budget in 2016, the government raised the pathetic N93.66 billion for Power, Works, Aviation, Transport and the Federal Capital Territory in 2015 to a healthy N433.4 billion the next year for Fashola’s Works Power and Housing ministry alone. Indeed, by 2018, the government, even in the face of other pressing obligations and dwindling earnings, had spent a whopping N2.7 trillion on infrastructure in three years, an unprecedented record.
And, unlike the past when the nation has had little to show for the billions of naira expended on infrastructure, demonstrable and visible results have emerged under Fasola’s watch. Yes, power outages still subsist, no thanks to the Discos who lack the capacity to evacuate power load generated by the Gencos. The difference now, however, is that today with Fashola’s “Incremental Power”, the consumer knows he does not need to wait endlessly for power to be restored. Now, unless there is a major transmission fault in his locality, power is back soon for the consumer’s use after an outage. So, consumers now run generators for shorter periods and spend less money on fuel to power their generators. This is a far cry from the situation up till 2015. Under Fashola’s watch, power generation has increased from 4,000 MW to 7,000 MW and distribution from 2690 MW to 5222 MW as at November 2018.
Meanwhile Fashola has initiated and led a bold effort to help out the problematic Discos by proposing and securing a N72 billion funding from the federal government, which owns 40 percent states in the Discos, for the distribution companies to invest in their equipment and operations in order to evacuate excess power. With this, the gains from the “Incremental Power” phase of the ministry’s road map will improve significantly since power outages should be fewer.
On the works front, Fashola got contractors back on site at hundreds of abandoned road projects. Indeed, by the beginning of 2017, work was going on simultaneously on at least two roads in each of the 36 states of the federation. The roads, including the seemingly jinxed Lagos-Ibadan Expressway, were mainly strategic arterial roads connecting states and major cities, with significant socio-economic benefits in the nation’s six geo-political zones. Construction and rehabilitation of roads involving 565 contracts are currently on-going across the nation under Fashola’s watch.
The minister’s strategy on housing growth strategy was hinged on the pilot of a National Housing Programme in 34 of the 36 states and FCT that had provided land for the scheme. Ongoing construction of different models of houses across the nation with at least 1,000 people – artisans, vendors, craftsmen and suppliers – engaged in each of the sites. Characteristically, Fashola has also sought the buy-in of the private sector by creating a better enabling environment for their participation in housing construction and development. Equity contributions for prospective home owners seeking mortgage loans from the Federal Mortgage Bank of Nigeria (FMBN) and the Federal Housing Authority (FHA) have been slashed drastically to provide easier access to housing. The institutions, which are parastatals under Fashola’s ministry now require zero percent (from 5 percent) contribution from those seeking mortgage loans up to N5 million and 10 percent (down from 15 percent) from those who want loans of over N5 million.
Even with the prodigious achievements he has notched up in the first term of the President Muhammadu Buhari’s administration, Mr Babatunde Fashola , the Honourable Minister of Power, Works and Housing, still has quite some distance to cover to reach the finish line of the “marathon“ which his ministry’s infrastructure road map has been. An encore for him on the next Federal Cabinet is what the nation deserves. Never mind the Discos.
Segun Odunuyi is a Lagos-based public commentator
By Blaise Udunze
Daily, the world watches Nigeria through a familiar lens in what appears to be a gory situation. Especially in cases when the news headlines tell stories of farmer-herder clashes, bandit attacks, kidnappings, villages reduced to ashes or deserted by the dwellers, as thousands of Nigerians have been displaced across states such as Zamfara, Plateau, Benue, Niger, Kaduna and Nasarawa. Subliminally, this is about to become a similarly ugly occurrence in southwestern Nigeria, which is fast becoming obvious if not nipped in the bud quickly.
Recorded data have shown that bandits, Boko Haram, and others killed over 190,000 Nigerians in 17 years and displaced 3.7 million people.
A human rights organisation, the International Society for Civil Liberties and Rule of Law (Intersociety), in its fearful revelation, has said that no fewer than 190,150 Nigerians have been killed by bandits, Boko Haram insurgents, and suspected armed herdsmen between July 2009 and March 19, 2026, as this calls for concern.
The dominant explanations often point to ethnic tensions, religious divisions, climate change, shrinking grazing routes or weak security institutions. No doubt, those factors are certainly part of Nigeria’s complex security crisis. Yet another question deserves serious examination.
What if, in some locations, the violence is also serving another purpose? What if some of the territories experiencing repeated displacement are the same places sitting atop some of Nigeria’s most valuable mineral deposits? More importantly, if such a pattern exists, who benefits when communities disappear?
Of a truth, these questions are uncomfortable, but undeniably they deserve careful investigation rather than dismissal.
For ages, Nigeria has been naturally endowed, and it is estimated to be rich in enormous significant reserves of gold, lithium, uranium, tin, columbite and other strategic minerals increasingly sought after in the global transition to clean energy technologies. As international demand for battery minerals continues to rise, these resources have become far more valuable than they were only a decade ago.
If one overlays publicly available geological information with maps showing persistent violence, some observers argue that striking geographical overlaps appear in several regions. Such overlaps alone cannot establish causation. Correlation is not proof of conspiracy. However, they raise questions worthy of independent scrutiny.
One issue attracting increasing attention and adequately yearns for answer is whether prolonged insecurity may inadvertently or deliberately create conditions that make mineral extraction easier.
Under Nigeria’s Nigerian Minerals and Mining Act 2007, mineral resources belong to the Federal Government, while mining rights are granted through licences and leases. Community engagement and land access are expected to form part of the licensing process, although implementation varies depending on circumstances. This raises an important policy question.
What happens when the communities expected to participate in those processes have already fled because of violence?
Displacement changes the dynamics of land ownership, consent and access. While no evidence automatically proves that attacks are orchestrated to facilitate mining, the sequence of violence followed by renewed commercial activity in some locations deserves closer examination by regulators, lawmakers and investigative journalists.
In conflict studies, researchers have long observed that wars often generate economic winners alongside humanitarian losers. Could elements of Nigeria’s insecurity also be producing economic beneficiaries?
Reports over the years have documented concerns about illegal mining operations across parts of northern Nigeria. Government agencies themselves have repeatedly acknowledged that criminal networks profit from the country’s vast mineral wealth. The unresolved question is whether isolated criminality has, in some instances, evolved into more sophisticated alliances involving political influence, financial interests and international supply chains. If so, the implications extend far beyond Nigeria.
Invariably, it is clearly known that lithium has become one of the world’s most strategic commodities, powering electric vehicle batteries and renewable energy storage systems. Gold has always remained one of the safest global investment assets during periods of uncertainty. Meanwhile, it is well confirmed that the global appetite for these minerals creates enormous financial incentives.
Suppose violent displacement reduces resistance to extraction. Suppose shell companies subsequently acquire mining interests. Suppose minerals then leave Nigeria through legitimate-looking export documentation while their true value remains understated.
These scenarios remain allegations unless supported by verifiable evidence. Yet they outline a framework that investigators may wish to test rather than ignore. Financial crime experts frequently identify trade mis-invoicing as one of the most common methods of illicit financial flows worldwide.
Could Nigeria’s solid minerals sector be vulnerable to similar practices? If valuable lithium ore is deliberately but inaccurately described as lower-value material on export documents, substantial wealth could potentially leave the country without reflecting its true market value. Likewise, if unrefined gold exits through privileged channels with limited scrutiny, questions naturally arise about oversight, transparency and accountability over criminal activities which have continued to stunt and disrupt the country’s socio-economic growth and at the same time cause carnage.
Such possibilities are not accusations against any particular institution or company. Rather, they illustrate why stronger monitoring systems are increasingly essential. Another question concerns logistics.
With the high level of criminal activities, industrial mining requires heavy machinery, diesel supplies, transportation networks and specialised personnel. These are not operations that can remain invisible indefinitely.
If certain territories are genuinely too dangerous for security agencies, how do industrial-scale extraction activities reportedly continue in some remote locations? If they do, who protects those operations? Who authorises their movement? Who verifies what is extracted? Who ensures royalties and export revenues reach public coffers? These are governance questions that demand institutional answers.
Equally important is the international dimension. Minerals extracted in Nigeria ultimately enter global supply chains. Gold may pass through international refining hubs before entering financial markets. Lithium may become part of battery manufacturing destined for electric vehicles, which are being sold across Europe, North America and Asia.
One known fact is that consumers purchasing products containing these minerals rarely know the full story of where they originated.
Increasingly, however, investors and governments are demanding ethical sourcing standards that trace minerals from extraction to final manufacture.
A critical factor that must be taken into cognisance is that if insecurity is creating opportunities for illegal or unethical extraction anywhere in the world, multinational companies have responsibilities alongside national governments, of which the onus falls on the Nigerian government.
Transparency cannot stop at the mine gate. Nor should accountability end at national borders. Another issue requiring attention concerns beneficial ownership.
Across many jurisdictions, shell companies can obscure the identities of individuals ultimately controlling commercial assets. If politically exposed persons or powerful business interests are hidden behind complex corporate structures registered offshore, identifying beneficiaries becomes significantly more difficult. This challenge is hardly unique to Nigeria.
Findings showed that from Latin America to Central Africa and Southeast Asia, resistant corporate networks have frequently complicated efforts to combat corruption and illicit resource extraction. That is precisely why open corporate registries, beneficial ownership databases and transparent mining licence disclosures are becoming global governance priorities. For Nigeria, the stakes could hardly be higher.
The country stands at the centre of the world’s emerging critical minerals economy. The Nigerian government can’t feign ignorance of the fact that, when handled transparently, these resources could finance infrastructure, education, healthcare, and industrial development for generations.
In no way would the government claim not knowing that when handled poorly, they risk becoming another chapter in the well-documented “resource curse,” where extraordinary natural wealth coincides with persistent poverty, insecurity and institutional weakness.
The ultimate challenge, therefore, is not simply about mining. It is about governance. It is about whether public institutions possess both the independence and capacity to ensure that natural resources benefit citizens rather than narrow interests. It is about whether conflict zones receive genuine peacebuilding efforts instead of becoming forgotten frontiers. And it is about whether international markets demand accountability with the same enthusiasm they demand raw materials.
None of these questions should be answered through speculation. They require rigorous investigations, forensic financial analysis, satellite imagery, mining license audits, customs records, beneficial ownership disclosures and courageous journalism.
They require governments willing to open their books. They require international cooperation capable of tracing money across borders. Most importantly, they require asking questions that have too often remained unasked.
Perhaps Nigeria’s security crisis is exactly what it appears to be: a tragic convergence of historical grievances, weak institutions, criminality and environmental pressures. Or perhaps, in some places, another layer of economic incentive deserves closer scrutiny.
Until those questions are thoroughly investigated, one possibility will continue to linger. Maybe the world’s attention has been fixed on the blood spilt above ground, while too little attention has been paid to the extraordinary wealth lying beneath it.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: bl***********@***il.com
Feature/OPED
What Does Nigeria’s $51bn Reserves Milestone Mean if Most New Foreign Money Can Leave Quickly?
Nigeria’s foreign reserves have climbed to about $51 billion, a decade-plus high, according to the Central Bank of Nigeria (CBN). EBC Financial Group (EBC) notes that this reflects stronger investor confidence, but the second half may show whether it holds, as the build rests on three cyclical drivers: oil earnings, short-term foreign money and a narrowing official-to-street naira gap.
Reserves rose from about $32 billion in April 2024, during a dollar shortage, to about $51 billion now, near the CBN’s target. Much came from two cyclical sources, strong oil earnings and money chasing high-yielding naira assets, so EBC expects the pace to slow or reverse. Fitch Ratings, a major international credit rating agency, expects a marginal decline to about $47 billion by the end of 2026, citing higher spending and external pressures.
David Precious, Senior Market Analyst at EBC Financial Group, said, “Nigeria’s reserve build is real but may not be durable yet, because nearly all of the new money is the kind that can leave quickly. Of the $10.37 billion that came in over the first quarter, the overwhelming majority was short-term portfolio funds rather than long-term investment, so a shift in oil prices, global interest rates or confidence in the naira might pull a large part of it straight back out.”
Most New Money Can Still Leave Quickly
The composition of the foreign inflows explains the caution over how long the build can last. The country attracted $10.37 billion in foreign investment in the first quarter of 2026, up 83.83 per cent year-on-year, according to the National Bureau of Statistics (NBS). Of that, $9.86 billion or 95.09 per cent, was portfolio money, largely short-term naira debt such as Treasury bills that investors can sell at the next auction, while foreign direct investment, the long-term kind that builds factories and jobs, was $135.08 million, or 1.30 per cent. Put simply, of each dollar coming in, about 95 cents can leave quickly, and barely one cent stays.
That money supports reserves while it stays. Dollars brought in to buy naira assets add to market supply, letting the CBN hold more reserves and steady the naira. It leaves when conditions change. Nigeria earns most of its export dollars from oil and gas, so lower oil prices mean fewer dollars, and as a member of the Organisation of the Petroleum Exporting Countries (OPEC), it cannot simply produce more, output capped by quota and reduced by theft and ageing fields. Higher global interest rates draw money toward safer returns abroad, and a weakening naira prompts investors to sell early. When oil fell in 2016 and 2020, foreign investors withdrew and could not convert naira to dollars as supply dried up, leaving the CBN to clear more than $7 billion in trapped obligations into 2024.
The Oil Boost is No Longer Certain
Oil looked like a dependable source of the dollars behind the reserves only months ago. Earlier in 2026, concern over disruption around the Strait of Hormuz lifted crude prices, and stronger receipts flowed in, with crude oil export earnings of $8.11 billion in the first quarter in the CBN’s balance-of-payments data. That support is now easing. The tension has subsided, and Brent traded near $72 on June 29, down about 24 per cent over the month, back to pre-conflict levels. With the price boost gone and output constrained, reserves are more exposed, leaning on non-oil earnings and investor patience rather than oil.
The Naira Still Trades at Two Prices
The naira has traded at two prices, an official rate and a higher parallel-market rate, and closing that gap into one trusted price is what many investors might watch most. Before committing funds, they may want assurance they can convert naira to dollars at a fair rate when they exit, and a wide gap revives the fear of being trapped that lingers from earlier shortages. The gap has narrowed to roughly N20 to N30, with the CBN’s official rate near N1,380 per dollar on June 26 against parallel-market quotes around N1,400. The International Monetary Fund (IMF) 2026 Article IV review urged Nigeria to depend less on this fast-moving portfolio money and to keep phasing out its multiple exchange-rate practices. The CBN’s Foreign Exchange Manual, in force from 1 June, is intended to make the market clearer, though such rules build confidence only once investors can freely trade dollars at the posted rate.
What could Make the Build Durable
A few signs that may show the build turning durable include a smaller gap between the official and street naira rates, more long-term foreign investment, and steadier oil earnings. A gap that stays small, now roughly N20 to N30, may mean investors trust the official rate and no longer need the street market. A clear rise in foreign direct investment, only $135 million last quarter against $9.86 billion of short-term money, might mean lasting capital is replacing funds that can leave at the next auction. Oil earnings that hold up, rather than sliding from the low $70s, should help keep reserves steady, since oil and gas bring in most of Nigeria’s export dollars.
“Reserves built on money chasing high yields can fall as fast as they rose, as they did after the last two oil shocks, when investors left, and the CBN spent years clearing a foreign-exchange backlog,” Precious added. “What holds through a downturn is slower money, direct investment, steady oil and non-oil export earnings and one credible naira rate, and that is the shift Nigeria has yet to make.”
By Olajumoke Bello
Across Nigeria, small and medium enterprises remain the backbone of economic activity. They drive trade, create jobs, and sustain millions of livelihoods. Yet, despite their importance, many SMEs continue to operate below their full potential due to persistent structural challenges.
Access to finance remains one of the most cited constraints. However, the issue today goes beyond the availability of capital. Many businesses struggle with financial readiness, weak documentation, and limited understanding of what lenders require. This often leads to missed opportunities, even when funding options exist.
At the same time, SMEs face gaps in market access and visibility. Business owners operate in highly localised environments, with limited exposure to broader networks that can unlock partnerships, new markets, and growth opportunities. This isolation can constrain scalability and reduce long-term competitiveness.
Equally important is the capability gap. Many entrepreneurs grow through resilience and experience but lack structured knowledge on critical areas such as financial management, export readiness, and digital adoption. Without this, even well-capitalised businesses can struggle to sustain growth.
These challenges point to a clear need for a more practical and integrated approach to SME support. It is no longer sufficient to offer standalone solutions. SMEs require ecosystems that combine knowledge, access, and direct engagement in ways that reflect how they actually operate.
A key shift is the move from centralised interventions to localised engagement. SMEs are deeply influenced by their immediate environments, whether markets, industrial clusters, or trade corridors. Solutions must therefore be brought closer to where these businesses function, allowing for more relevant support and stronger relationships.
Another important shift is from awareness to action. Business owners do not only need information; they need insights that they can apply immediately. This includes understanding how to structure their finances, how to access trade opportunities, and how to connect with the right partners to scale their operations.
There is also a growing need for continuity. Many SME-focused initiatives deliver strong initial impact but lack follow-through. For support to be effective, it must extend beyond one-off engagements into sustained relationships, with clear pathways for onboarding, advisory, and growth.
For financial institutions, this presents both responsibility and an opportunity. Supporting SMEs now requires moving beyond transactional banking to deeper partnership models. It requires understanding businesses at a granular level and co-creating solutions that evolve with their needs.
At Stanbic IBTC, this perspective continues to shape our approach to SME development. Our focus is on delivering practical support that translates into real business outcomes, helping enterprises grow, compete, and contribute more meaningfully to the economy.
As part of this commitment, we are extending our SME engagement to the regions through the Nigeria Business Summit Regional Tour. The tour will take structured, on-ground activations into key commercial hubs, where SMEs can access funding guidance, trade insights, advisory support, and direct engagement with financial experts.
The regional tour will take place across five strategic locations, bringing these solutions closer to business owners in Aba, Onitsha, Ibadan and Kano.
This approach reflects an important principle. When support moves closer to businesses and when solutions are delivered in ways that are practical and continuous, SMEs are better positioned to grow sustainably. In turn, this strengthens not only individual enterprises but the broader economy.
Olajumoke Bello is the Head of Enterprise Banking at Stanbic IBTC Bank
