Tunde Bakare
The Senate is becoming worried about the future of the power sector saying tariff shortfalls is creating uncertainty in the industry.
The Senate Committee on Power said the liquidity crisis bedeviling the power sector with tariff shortfalls in the industry have indicated that the government owes about N200bn to electricity generating companies every month.
According to the Committee, since this year, the government has not paid the power producers, and that this has raised the debt to about N800bn.
The Chairman of the Committee, Senator Enyinnaya Abaribe, during a retreat held in Ikot-Ekpene, Akwa Ibom State, on Saturday.
The retreat, organised by the Nigerian Electricity and Regulatory Commission, was to proffer solutions to critical and emerging issues in the Nigerian Power sector.
Abaribe expressed worries that the government has yet to make any payment to the power firms this year, indicating that the country is already indebted by N800bn, in addition to previous indebtedness amounting to over N3tn
“I will not be able to just, in this short interview, give you the statistics of these things. But there’s one key statistic that is very, very necessary for Nigerians to know. There’s a liquidity crisis in the power sector. 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 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. The generating companies owe the gas suppliers. The gas suppliers cannot just continue to supply gas indefinitely,’’ Abaribe said.
The Senator, however, expressed the hope that there is light at the end of the tunnel.
“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.
“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,” he stated.
The Minister of Power, Adebayo Adelabu, while giving an overview of the power sector reforms, highlighted the achievements of the President Bola Tinubu-led administration, especially in the area of an increase in power generation.
He also listed the challenges of the sector to include funding paucity and vandalism of energy equipment, among others, saying “only in this country are energy equipment being vandalised in such magnitude.”
The Governor of Akwa Ibom State, Umo Eno, who was represented by his Deputy, Senator Akon Eyakenyi, described Small and Medium Enterprises as the engine of economic growth in most societies, noting that only a steady electricity supply could unlock the sector.
He expressed hope that with the calibre of resource persons at the retreat, critical issues bedeviling the power sector, would be addressed.