The Federal Government’s failure to meet its financial obligations to power generation companies (GenCos) has intensified Nigeria’s electricity sector crisis. Fresh data shows that only N76.95 billion, roughly four percent of the N1.928 trillion subsidy required in 2025, was released.
Despite budgeting N958 billion for electricity subsis last year, the government’s disbursement left an outstanding liability of about N1.85 trillion. A quarterly analysis by the Nigerian Electricity Regulatory Commission (NERC) revealed that subsidy obligations stood at N536.40 billion in Q1 2025, N514.36 billion in Q2, N458.76 billion in Q3, and N418.79 billion in Q4. The subsidy for January 2026 alone was reported at N126.48 billion, highlighting the persistent funding gap.
Industry analysts warn that the failure to fund subsis has left GenCos unable to pay gas suppliers, causing reduced fuel supply and a decline in nationwide electricity generation. Inadequate funding of the Nigerian Bulk Electricity Trading Plc (NBET), the market’s central offtaker, has also contributed to the crisis.
Former Niger Delta Power Holding Company Managing Director, Chiedu Ugbo, criticised public disputes over debt figures, stating they distract from practical solutions. “This is a time for leadership and collaboration, not blame-shifting. We must confront our realities with honesty and shared responsibility,” he said.
Mr Rumundaka Wonodi, former NBET Managing Director, stressed the importance of timely payments to GenCos, noting that NBET acts as a proxy for the government. He urged the Federal Government to adequately fund NBET to meet obligations, while maintaining partnership with GenCos and distribution companies for sector ility.
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