•85m Nigerians in darkness, thousands of jobs at risk –Experts •Advocate home-grown solutions
By Uche Usim
President Donald Trump’s decision to significantly slash the funding of the United States Agency for International Development (USAID) to allow for a 90-day review, has placed Nigeria’s rural electrification drive in jeopardy.
According to experts in the renewable energy field, the situation is set to widen the energy gap if ongoing projects are starved of funds.
With an estimated 85 million Nigerians (40 per cent of the population) still without access to electricity, experts fear the setback could stall critical projects aimed at illuminating underserved communities.
As the reverberating effects unfold, stakeholders are advocating for homegrown solutions to accelerate electrification and reduce Nigeria’s dependence on foreign aid.
In an article, the Chief Executive Officer of Extreme Mutual Technique Limited, a solar and renewable energy firm, Bome Ojobo noted that in rural areas where the national grid remains virtually non-existent, solar power has become a lifeline, driving economic activities, powering schools and sustaining healthcare facilities.
However, he noted that the decision by the United States government to withdraw or significantly reduce its renewable energy assistance via USAID threatens to unravel years of progress and plunge millions back into darkness.
He explained that for years, USAID has played a crucial role in advancing Nigeria’s solar energy market through strategic funding and technical support.
Its initiatives, including Power Africa, Electrify Nigeria and Scaling Up Renewable Energy (SURE-P), have injected over $150 million into the sector, fueling the expansion of off-grid solar solutions.
But with this support set to dwindle, Ojobo hinted that the consequences could be catastrophic, triggering an energy crisis with far-reaching economic and environmental implications. “The most immediate impact of USAID’s withdrawal will be felt in rural communities, where over 85% of households rely on off-grid solar solutions. The cost of solar products is expected to rise by 20–40%, rendering them unaffordable for more than 30 million Nigerians.
“This could force many households to revert to hazardous alternatives such as kerosene lamps and firewood, exacerbating health risks and contributing to environmental degradation,” he said.
He also stated that the looming crisis extends beyond household energy needs as USAID’s involvement has been instrumental in de-risking private investments in Nigeria’s solar sector, attracting global financiers and mobilising funds from development banks.
Ojobo said USAID’s departure is projected to leave a gaping $500 million investment shortfall, potentially crippling both ongoing and future solar projects. The mini-grid sector, expected to electrify 100,000 villages by 2030, now faces an uncertain future with electrification efforts likely to be set back by at least a decade.
Nigeria’s burgeoning renewable energy sector, which currently employs over 1.2 million people, including solar engineers, technicians and entrepreneurs, stands on shaky ground. Companies that have thrived under USAID-backed programmes, such as Lumos, Green Village Electricity (GVE) and Husk Power Systems, may struggle to sustain operations.
The potential job losses could significantly impact rural economies, further exacerbating unemployment among young professionals.
Compounding the crisis is the environmental toll of USAID’s exit.
In the absence of affordable solar alternatives, rural businesses and households are expected to turn to diesel generators, leading to a projected 60 per cent surge in fuel costs. The shift is anticipated to add at least five million metric tons of CO₂ emissions annually, dealing a major blow to Nigeria’s climate commitments under the Paris Agreement and jeopardizing the country’s Net Zero by 2060 roadmap.
With these dire consequences looming, analysts say that urgent action is required to safeguard Nigeria’s rural electrification gains. The government, through the Rural Electrification Agency (REA), must step in with substantial investments, allocating at least $200 million to bolster off-grid solar expansion. Additionally, introducing tax exemptions and removing import duties on solar components can help cushion the financial blow and maintain affordability.
Also speaking on the matter, the Director General of the Center for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, told Daily Sun that President Trump’s protectionist posturing calls on the federal government to commit more to self-reliance policies and less import dependent in critical areas of the economy, especially energy, food, pharmaceuticals and security.
“There is a need to ensure that policies of the government are geared towards ensuring economic resilience that minimises vulnerabilities to external shocks.
“Supply chains should be localised as much as possible. The emerging new global order is progressively leaning towards economic nationalism, de-globalisation and economic fragmentation.
“Domestic economic policies must be framed within the context of this reality.
“Current global developments reinforce the need to protect domestic industries against unfair competition from imports”, he said.
However beyond the government intervention, experts insist that Nigeria must aggressively seek alternative funding sources. The World Bank, African Development Bank (AfDB), and the EU Green Energy Fund present viable options for plugging the renewable investment gap.
Strengthening public-private partnerships (PPPs) with key players from China, Germany and the United Kingdom could also ensure the continuity of critical solar projects.
They also listed local manufacturing of solar components as another avenue that must be urgently explored. Establishing domestic production hubs for solar panels, batteries and inverters can reduce reliance on foreign aid and create over 500,000 new jobs, further stimulating economic growth in the clean energy sector.
Expanding access to microfinance and Pay-As-You-Go (PAYG) solar solutions will also be crucial in mitigating the impact of USAID’s exit.
By working closely with Nigerian banks and fintech companies, stakeholders can develop flexible financing models that keep solar energy within reach for low-income households.