Nigeria’s power sector is facing a deepening liquidity crisis as the Federal Government’s electricity debt has ballooned by an additional N800 billion in 2025 alone, according to the Senate Committee on Power.
The Committee Chairman, Senator Enyinnaya Abaribe, disclosed this alarming figure on Saturday during a media briefing at a retreat held in Ikot-Ekpene, Akwa Ibom State, organized by the Nigerian Electricity Regulatory Commission (NERC).
“There’s a liquidity crisis in the power sector. The government owes power generating companies about N200 billion every month, and since the beginning of 2025, no payment has been made — bringing the total debt for this year to N800 billion,” Abaribe revealed.
He further noted that before 2025, the sector was already burdened with an outstanding debt of over N3 trillion. The crisis has disrupted payments to generating companies (GenCos), which in turn owe gas suppliers who provide the fuel for power generation.
“Gas suppliers cannot continue to supply indefinitely when they’re not being paid,” Abaribe warned.
A Decision Must Be Made – Abaribe
Senator Abaribe stressed the urgent need for both federal and state governments to come together and take decisive action.
“We now have two tiers of electricity markets. The Federal Government can generate and supply, and so can the state governments. But a decision must be made — do we subsidize fuel or electricity?”
He emphasized that, unlike fuel, electricity powers production, industries, and the economy, and deserves serious consideration for strategic subsidy policies.
Tinubu Govt Making Progress – Power Minister
Also speaking at the event, Minister of Power Adebayo Adelabu highlighted reforms under the Bola Tinubu administration, including a modest increase in power generation capacity. However, he admitted that funding gaps, energy equipment vandalism, and operational inefficiencies still plague the sector.
“Only in this country do we see such massive vandalism of energy infrastructure,” Adelabu lamented.
Akwa Ibom Governor Backs Electricity Reform
The Governor of Akwa Ibom State, Umo Eno, represented by his deputy, Senator Akon Eyakenyi, emphasized the importance of stable electricity for the growth of Small and Medium Enterprises (SMEs).
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“SMEs are the engine of economic growth. Without reliable power supply, their full potential can never be unlocked,” she said.
Stakeholders at the retreat expressed optimism that, with the current momentum, sustainable solutions will emerge to tackle the long-standing power sector problems in Nigeria.
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