Nigeria’s troubled power and aviation sectors continue to struggle despite the Central Bank of Nigeria (CBN) officially closing out its ₦500 billion Power and Airline Intervention Fund (PAIF)—one of its largest development finance programmes—14 years after its launch.

The fund, approved by the Monetary Policy Committee (MPC) in 2010, was designed to address the economy’s longstanding shortage of long-term credit and ease the country’s crippling power supply constraints. Of the total intervention envelope, ₦300 billion was dedicated to power and airline projects, while ₦200 billion was allocated to the Refinancing and Restructuring Facility (RRF).

Fresh data released by the CBN shows that ₦317.76 billion was disbursed in total, supporting 75 projects across both sectors as the apex bank sought to stabilise operators and spur infrastructure investments.

The CBN reported that ₦270.68 billion in principal repayments had been recovered since inception, while an outstanding balance of ₦47.08 billion was converted to equity to protect public funds in cases where borrowers remained viable but unable to meet obligations.

“With the equity conversion completed and the loan book substantially recovered, the intervention has now been fully closed out,” the apex bank confirmed.

But despite the financial closure, operators and analysts insist that the underlying challenges that necessitated the intervention remain largely unresolved.

A breakdown of the disbursement reveals:Power Sector – 62 percent, ₦196.99 billion disbursed 51 projects financed

This reflects the sector’s heavy demand for capital to expand generation, upgrade transmission lines, and rehabilitate distribution infrastructure.

Yet, even after years of funding, generation capacity remains inconsistent, gas supply constraints persist, and the national grid continues to suffer frequent collapses.Airline Sector – 38% ₦120.76 billion disbursed 24 projects financed.

Despite the support, domestic airlines continue to battle rising operational costs, ageing fleets, safety concerns, and severe forex pressure—factors that have led to recurrent disruptions and the collapse of multiple carriers.

However, industry experts argue that the pace of disbursement did not match the rapid deterioration in infrastructure, especially in power where demand far outstrips supply.

While the PAIF succeeded in providing long-term financing—an intervention the market could not otherwise deliver—the closure underscores the limited impact of financial injections without accompanying reforms.

“The challenges are beyond funding,” one power sector analyst noted. “There are systemic issues—policy inconsistencies, inadequate tariff structures, liquidity gaps, and a weak transmission backbone.”

Aviation analysts share similar views, pointing to foreign exchange shortages, high maintenance costs, and regulatory instability as persistent threats to the sector’s sustainability.

The CBN said future policy efforts would focus on more sustainable financing frameworks, but stakeholders argue that only deep structural reforms will unlock the long-term competitiveness of both sectors.

The closure of the PAIF marks the end of one of the CBN’s most ambitious interventions, but for many operators, the real work of fixing the sectors is only just beginning.

 

Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (Syndigate.info).