“President Tinubu Greenlights N3.3 Trillion Partial Payment for Power Sector Debts”
President Bola Ahmed Tinubu has given the go-ahead for the partial payment of Nigeria’s staggering N3.3 trillion power sector debts, a move aimed at addressing longstanding financial challenges within the sector. Adebayo Adelabu, Nigeria’s Minister of Power, announced this development during the 8th Africa Energy Marketplace in Abuja on Thursday.
The breakdown of the approved payment plan reveals that the federal government’s N1.3 trillion debt to power-generating companies will be settled through a combination of cash injections and promissory notes. Additionally, approximately $1.3 billion (equivalent to N1.994 trillion at the current official exchange rate) owed to gas companies will be repaid via cash payments and future royalties.
Adelabu emphasized that the government has already initiated payments towards the N1.3 trillion debt owed to power-generating companies, with plans to address the remaining portion through promissory notes over the next two to five years. Furthermore, he highlighted the government’s commitment to addressing outstanding debts owed to gas suppliers, with a recent $120 million payment made in March as part of the $1.3 billion owed.
Despite these efforts to alleviate financial strains within the power sector, challenges persist, as evidenced by the recent approval of a 230% electricity tariff hike for band A customers by the Nigerian Electricity Regulatory Commission. While the government later reduced the hike, reactions from various quarters, including the Nigeria Labour Congress and Trade Union Congress, indicate widespread opposition to the tariff adjustment.
The decision to address power sector debts reflects a concerted effort by the government to stabilize the sector and enhance electricity supply across the country. However, ongoing debates surrounding tariff adjustments underscore the complexity of balancing financial sustainability with consumer affordability in the quest for a more reliable and accessible power infrastructure.
