Juliet Ezeh
A fresh layer of uncertainty has emerged in Nigeria’s electricity market as power generation companies raise concerns over transparency in the ongoing debt reconciliation process with the Federal Government.
The dispute is no longer just about the size of the debt but about how the figures are being determined, with operators warning that unclear accounting could weaken investor confidence in the sector.
The Minister of Power, Adebayo Adelabu, recently indicated that the government’s liabilities to generation companies may be lower than widely reported, suggesting that ongoing reconciliation could reduce the figure to about N4tn.
However, generation companies argue that the process lacks inclusiveness and clarity. The Executive Secretary of the Association of Power Generation Companies, Joy Ogaji, stressed that reconciliation must involve all parties to ensure credibility.
According to her, the last joint reconciliation meeting involving stakeholders was held in March 2025, and no subsequent engagement has taken place to justify the revised figures being presented.
The companies are particularly concerned about the methodology used in arriving at the government’s estimates, noting that key cost components may have been excluded. These include long-standing unpaid invoices, foreign exchange differentials, interest charges, and operational costs tied to inefficiencies in gas supply and transmission.
Operators also questioned the reliance on the Nigerian Bulk Electricity Trading Plc as a primary source of data, arguing that it does not fully capture the complexities of financial transactions within the electricity market.
Beyond the dispute, stakeholders warn that inconsistent or opaque financial records could discourage much-needed investment in Nigeria’s power sector, which continues to struggle with liquidity challenges and infrastructure gaps.
The situation comes amid broader reform efforts by the administration of Bola Tinubu to clean up the sector’s finances and resolve legacy debts. While an audited portion of about N2.8tn has reportedly been verified, discussions are still ongoing to reconcile additional claims.
Analysts say the current disagreement highlights a deeper issue within the electricity market—one that goes beyond debt figures to the need for trust, transparency, and coordinated engagement among stakeholders.
As negotiations continue, the outcome of the reconciliation process is expected to play a critical role in shaping investor sentiment and determining the pace of reforms in Nigeria’s struggling power sector.
Juliet Ezeh is the founder and chief reporter at Westbridge Reporters with over 7 years of experience in journalism. She covers crime, industry, policy, and social developments, delivering timely and accurate reporting.