POWER SECTOR: NOT YET UHURU
Nick Dazang
On Sunday, 5th April 2026, the Special Adviser on Information, Bayo Onanuga, said, through a statement, that President Bola Ahmed Tinubu, had approved a payment plan to settle N3.3 trillion outstanding debt in the power sector under the presidential power sector financial reforms program.
Mr. Onanuga further said:”The long-standing debts accumulated between February 2015 and March 2025. Following verification, N3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution”.
To reinforce and shed more light on Mr. Onanuga’s statement, the Special Adviser to the President on Energy, Olu Arowolo-Verheijen, said the program would go beyond settling legacy debts to restoring confidence in the power sector.
The announcement was a huge relief to Nigerians. Before then the power sector was in comatose mode. For more than six months, the country, from one expanse to the other, was in pitch darkness. Big and small businesses ground to a halt. Coinciding with the heat that ushers in the rainy season, Nigerians were thrown into untold misery.
The Minister of Power, Chief Adebayo Adelabu, who ought to be, front and center, addressing the challenges of this crucially important sector, was simply overwhelmed. His incompetence and helplessness were defined by an in-eloquence only reminiscent of the incoherent Oracle at Delphi. A picture, which trended on social media, showed the Minister speaking on a handset which was connected to a power bank.
If the N3.3 trillion settlement is viewed as a victory of sorts, and one that is fair, available data not only knock the bottom out of this early triumph, they render it Phyrric and transient. This is because as at 2026, the debt owed Generating companies (GenCos), which stemmed from unpaid invoices by the Nigerian Bulk Electricity Trading Company(NBET), had stood at N6.8 trillion.
And contrary to the government’s claim that the payment of the N3.3 trillion debt followed “verification” and that the figure was “agreed as a full and final settlement”, the last reconciliation between government and key stakeholders in the power sector agreed at N4 trillion.
The Chief Executive Officer of the Association Power Generation Companies(APGC), Joy Ogaji, not only attests to this, she disclaims the latest figure(of N3.3 trillion) being bandied in these clear and unmistakable terms:”We are not aware of any such verification outside the last reconciliation concluded in March 2025”.
The government has also not been forthcoming as to how the N3.3 trillion will be disbursed to the GenCos. Neither has it issued any timelines to undergird payment.
Even though the government had earlier issued bonds to the tune of 501 billion to the GenCos, the payment is insignificant when viewed against the debts they owe gas suppliers. Besides, the conditions of disbursements are said to be stringent.
These have failed to impress or incentivize gas suppliers to increase their supplies to thermal plants being ran by the GenCos.
The payment of N3.3 trillion thus comes short of addressing the challenges of the power sector which cuts across generation, transmission and distribution. It also fails woefully to address concerns being voiced on the privatization process that had informed the atomization of the sector.
Like the privatization exercise that took place on the watch of former President Ibrahim Babangida, best practices were observed only in the breach. Patronage, rather than technical expertise and capacity to deliver, governed and suffused the process.
Until now, and due to the huge debts owed GenCos, they faced severe liquidity challenges. They also suffered from acute operational and maintenance difficulties.
The transmission companies are equally hamstrung. They have difficulty transmitting the paltry electricity being generated by thermal and hydroelectric plants. Grid collapse has since become a monthly affair.
As at 2020, electricity distribution companies(DisCos) owed the federal government N2.6 trillion. The debt was due to unpaid remittances to NBET. The DisCos have had other issues spanning foreign exchange and operational inefficiency. For instance, in spite of a 76.34% collection efficiency in January 2026, they nonetheless, suffered a revenue shortfall of N63.46 billion.
Several of the DisCos are under receivership either of the Asset Management Corporation of Nigeria (AMCON) or the banks. This is on account of debt-related insolvencies. Key DisCos reportedly under management receivership include those of Ibadan, Kano, Kaduna, and PortHarcourt. Due to their massive debts and insolvencies, DisCos have been subjected to legislative summonses.
To put the power sector in good stead, the government must adopt a holistic and comprehensive approach. Generation, transmission and distribution must work optimally and in sync. Government must engage and agree with critical stakeholders in the generating sector as to what it owes and how it intends to pay. It cannot foist a figure on them by presidential fiat.
Additionally, alternative forms of power generation, other than thermal and hydro-electricity, should be aggressively invested in. Solar power, which is clean, cheap and available, should be harnessed. It should then be put on a separate grid to power homes and offices. Thermal and hydro power should thereafter be dedicated to manufacturing, the Organized Private Sector, hospitals and schools.
The N3.3 trillion payment, no doubt, is a shot in the arm. But it is a short term measure and it is not all-encompassing. It is probably calibrated to safe face, especially for a president who once vowed that Nigerians should not re-elect him if he did not provide electricity.
We must go the whole hog. We must address the challenges that ail all facets of the power sector. As it is, it is not yet Uhuru for the power sector.
