Nigeria’s power sector is teetering on the edge of collapse, with the federal government now owing over ₦800 billion to electricity generating companies (GenCos) just in 2025 alone, according to the Senate Committee on Power.
Senator Enyinnaya Abaribe, who chairs the committee, revealed the figure during a retreat organised by the Nigerian Electricity Regulatory Commission (NERC) in Ikot-Ekpene, Akwa Ibom State, over the weekend.
He said the government has failed to make any payments to the GenCos this year, pushing the sector deeper into a severe liquidity crisis.
“There’s a liquidity crisis in the power sector,” Abaribe said. “The generating companies are owed so much, the distribution companies are also owed so much.
“The tariff shortfall that we have means that every month the government owes ₦200 billion of payments, and for this year, 2025, no payment has been made. In other words, we’re already short by ₦800 billion.”
He added that the total debt burden in the sector has now climbed above ₦3 trillion, worsening the ability of GenCos to pay gas suppliers who power the electricity turbines.
“The generating companies owe the gas suppliers. The gas suppliers cannot just continue to supply gas indefinitely,” Abaribe warned.
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Despite the grim numbers, the senator held out a sliver of hope. “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 continued, “How do we get out of this? How do we pay for it? Who pays? And so forth, everywhere else in the world, that decision is always taken. 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.”
Also present at the retreat was the Minister of Power, Adebayo Adelabu, who shared an overview of recent reforms under President Bola Tinubu’s administration.
He pointed to a modest increase in power generation but admitted that funding shortfalls and equipment vandalism remain major challenges.
“Only in this country are energy equipment being vandalised in such magnitude,” Adelabu lamented.
Akwa Ibom State Governor Umo Eno, represented by his deputy, Senator Akon Eyakenyi, said that stable power supply was crucial to the survival of small and medium businesses, which he described as the engine of the economy.
He expressed hope that with the expertise gathered at the retreat, some of the long-standing problems in the sector could finally begin to see meaningful solutions.