Unpaid Bills Fuel Sector Instability
Senator Enyinnaya Abaribe, Chairman of the Senate Committee on Power, disclosed this troubling situation during a press briefing at a retreat in Ikot-Ekpene, Akwa Ibom State. The retreat, organized by the Nigerian Electricity Regulatory Commission (NERC), aimed to find solutions to the persistent challenges plaguing the nation's power sector.
Abaribe stated that the government has failed to make any payments to the GenCos since the beginning of 2025. This non-payment has added a staggering N800 billion to the existing debt burden, which already stood at over N3 trillion. "The tariff shortfall that we have means that every month the government owes N200bn of payments, and for this year, 2025, no payment has been made. In other words, we’re already short by N800bn. Before this time, we had about N3tn debt to the generating companies," he explained.
The implications of this mounting debt are far-reaching. The GenCos, in turn, owe gas suppliers, creating a precarious situation where the continuous supply of gas, crucial for power generation, is at risk. "The generating companies owe the gas suppliers. The gas suppliers cannot just continue to supply gas indefinitely," Abaribe warned.
A Call for Decisive Action and Shared Responsibility
Despite the grim outlook, Senator Abaribe expressed optimism that solutions could be found. He emphasized the need for a decisive intervention by both the Federal and State Governments, given the decentralized nature of the electricity market. "The hope is this: a decision must be taken by the Federal Government and the state governments because right now, we have two tiers of electricity markets. The state can do it, the Federal Government can do it, so they must all come together and make that decision," he urged.
Abaribe further highlighted the fundamental policy choices facing the nation, drawing a parallel between fuel subsidies and potential electricity subsidies. "Do we decide to subsidise fuel that we all use to run around, or do we see the decision to subsidise electricity that goes to everyone of us in terms of production. So that’s our choice to make," he stated, underscoring the need for a strategic and potentially politically challenging decision.
Government Highlights Achievements Amidst Persistent Challenges
The Minister of Power, Adebayo Adelabu, provided an overview of the power sector reforms, emphasizing the achievements of President Bola Tinubu's administration in increasing power generation. However, he also acknowledged the significant challenges that persist, including funding scarcity and the pervasive issue of vandalism of energy infrastructure. "Only in this country are energy equipment being vandalised in such magnitude," Adelabu lamented.
Akwa Ibom Governor Calls for Stable Power to Drive Economic Growth
Governor Umo Eno of Akwa Ibom State, represented by his Deputy, Senator Akon Eyakenyi, underscored the critical role of a stable electricity supply in unlocking the potential of Small and Medium Enterprises (SMEs), which he described as the engine of economic growth. He expressed hope that the expertise gathered at the retreat would lead to tangible solutions for the power sector's deep-seated problems.
The revelations from the Senate Committee paint a concerning picture of a power sector teetering on the brink due to a massive liquidity crunch. The inability of the government to meet its financial obligations to power generators threatens the stability of the entire energy value chain and underscores the urgent need for decisive policy interventions and collaborative efforts between federal and state authorities.