Federal Government’s Approval of N3.3tn for Power Sector Debts Sparks Controversy
The recent approval of N3.3tn by the Federal Government to settle longstanding debts in the power sector has reignited debates and raised questions about the government’s commitment to resolving the crisis. Power generation companies (GenCos) have expressed frustration, as they claim they have not received any payments despite similar assurances made nearly two years ago.
Two Announcements of Debt Settlement
Our correspondents report that the Federal Government has announced the approval of N3.3tn on two different occasions to clear the debts owed to power generation companies since 2015. In May 2024, the Minister of Power, Adelabu, stated that President Bola Tinubu had approved the gradual payment of power sector debts estimated at over N3.3tn. The plan included a cash injection of N1.3tn for GenCos and $1.3bn for gas companies, with the latter to be paid via cash and future royalties.
This announcement came at a time when gas suppliers cut supply to power plants due to unpaid legacy debts, causing widespread power outages in the first quarter of 2024. Adelabu mentioned that the government had already started paying the cash portion of the N1.3tn debt and was working on settling the remaining through promissory notes within a timeframe ranging from two to five years.
Recent Developments and Implementation
In a similar development on April 6, 2026, the presidency announced that Tinubu had approved the payment plan to finally settle the outstanding debts under the Presidential Power Sector Financial Reforms Programme. According to a statement by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, the debt repayment plan followed the final review of the legacy debts that have plagued the power sector for more than a decade.
Onanuga revealed that the long-standing debts accumulated between February 2015 and March 2025, with N3.3tn agreed upon as a full and final settlement. He noted that implementation had begun, with 15 power plants signing settlement agreements totaling N2.3tn. The Federal Government has raised N501bn to fund these payments, with N223bn already disbursed.
Stakeholders Question Delays and Inconsistencies
Despite these developments, stakeholders have questioned the delay in implementing payments as announced in 2024. They wonder why the government waited until power generation fell from 5,000 megawatts in 2025 to 3,000 megawatts in the first quarter of 2026.
Joy Ogaji, the CEO of the Association of Power Generation Companies, criticized the inconsistency in the debt figures. She mentioned that the Federal Government approved N4tn in July 2024, but the current figure is N3.3tn. Ogaji expressed concern over the lack of clarity regarding how the government arrived at this figure and whether it includes debts owed to gas companies or covers specific periods.
Ogaji also highlighted that gas companies have warned they will not supply unless the GenCos are ready to pay. This has led to a deepening power shortage, as gas suppliers halted supply to thermal power plants over an estimated N3.3tn debt owed by power generation companies.
Public Reaction and Criticism
Nigerians have reacted with skepticism to the latest statements from the presidency, particularly on social media, where many questioned whether the policy was being implemented or simply being repeatedly announced without tangible progress. Critics like Bolaji Abdullahi of the African Democratic Congress accused the government of propaganda and a lack of transparency.
Users on platforms like X (formerly Twitter) pointed out the lack of accountability and questioned the government’s communication strategies. Emryz, for example, argued that debt repayment alone would not address the sector’s structural challenges and suggested that investments in the national grid would be more beneficial.
Facebook users also voiced their frustrations, accusing the government of misleading the public and lacking credibility. Anagbogu Valentine Chigbogu described the situation as deceptive and questioned the government’s intentions.
Ongoing Challenges and Uncertainty
The ongoing dispute over the debt figure and delayed payments has heightened uncertainty in the electricity market. Industry stakeholders warn that failure to resolve the issue could further strain gas supply and deepen the nation’s power shortages. The need for transparency, consistency, and effective implementation remains critical for restoring trust and ensuring the stability of the power sector.
