Daniel Adaji
The Federal Government has recorded a reduction of N4tn in electricity tariff debt, Minister of Power, Chief Adebayo Adelabu, announced on Thursday.
During the sixth ministerial press briefing in Abuja, Adelabu disclosed that improved revenue collection and ongoing market reforms had drastically reduced government subsidies and outstanding liabilities.
“Industry revenue has increased by 70 per cent, leading to a 35 per cent reduction in the government’s subsidised direct shortfall,” Adelabu stated.
“We envisaged a subsidy of about N3tn for 2024 based on the old values. This has now been reduced to N1.94tn. That is a clear-cut reduction of over N1tn.”
He attributed the progress to financial discipline, improved liquidity in the Nigerian Electricity Supply Industry (NESI), and strategic interventions such as the creation of the Nigeria Independent System Operator (NISO).
“This demonstrates that financial viability and service delivery can co-exist harmoniously,” he said.
Adelabu explained that the total tariff shortfall in the power sector has now been reduced by N700bn, with Nigeria Electricity Liability Management Company (NELMCO) also settling N7.36bn in post-privatization liabilities owed to Abuja Electricity Distribution Company (AEDC).
These efforts are part of a broader drive to clear the over N4tn in cumulative debts choking the sector.
The development comes amid heightened public concern over irregular and inflated electricity bills.
Advocacy groups have condemned the recent revelation that Lagos State Deputy Governor, Dr Obafemi Hamzat, received an N29m bill for April—an almost 1,000 per cent spike from March’s N2.7m.
The Executive Director of the Electricity Consumer Protection Advocacy Centre, Chief Princewill Okorie said, “This incident could be a positive turning point if it compels the state to investigate how these companies operate. The consumer protection agency is failing. Government oversight is weak. DisCos are breaking the law,l.”
In a bid to enhance transparency and operational efficiency, Adelabu highlighted the separation of the Transmission Service Provider (TSP) from NISO.
“Now, we are separating the two functions. The provider of infrastructure is separate, and the driver of transmission activity is separate,” the Minister explained.
“I believe this marks a new beginning for our transmission activities,” he added.
He emphasized that this long-delayed reform, officially launched by the Vice President of Nigeria, Kashim Shettima on April 8 with the approval of President Bola Tinubu, will ensure clear accountability and measurable performance across the transmission value chain.
Adelabu said the creation of NISO would bring an end to the confusion that has plagued Nigeria’s power transmission operations.
“If the driver is not driving well, we don’t know whether it is the driver who does not know how to drive, or it is the vehicle that is not good. Now, we will measure the driver separately,” he explained.
Meanwhile, power generation companies (GenCos) are sounding the alarm over the mounting debt burden, warning of an imminent nationwide blackout if the Federal Government fails to settle outstanding invoices totalling over N4tn.
“The power generated by GenCos has continued to be consumed in full without corresponding full payment,” said Col. Sani Bello (Rtd.), Chairman of the GenCos’ Board of Trustees.
“This situation has dire consequences for the GenCos and, by extension, the entire power value chain.”
Despite the progress reported by the Ministry of Power, experts insist that resolving NESI’s deep-rooted liquidity crisis will require consistent government action and full stakeholder collaboration.
Indicating his optimism in the power sector, Adelabu said, “This is a step forward. Under the new agenda of Mr. President, His Excellency Bola Ahmed Tinubu, we are laying the foundation for a more stable, reliable, and financially sustainable power sector.”