By Pius Mordi
Since 1999 when President Olusegun Obasanjo began the ambitious project of weaning Nigeria from the crippling electricity supply shortage, over a humongous N11 trillion (about $30 billion) has been spent on the power sector.
Despite the huge resources sunk into the sector, available electricity for distribution has hardly ever gone beyond 4,000 mega watts. In the past three months, what has been abysmal all the years has become a nightmare that has left 78% of homes and industries with unstable or no power power at all.
It was no surprise that when on April 5 Aso Rock announced that President Bola Tinubu has approved the payment of N3.3 trillion debt owed some power companies, eyebrows were raised within and outside the industry. According to a statement issued by Mr. Bayo Onanuga, Special Adviser to the President on Information and Strategy, the approval was made under the Presidential Power Sector Financial Reforms Programme which, he said, were “long-standing debts accumulated between February 2015 and March 2025”.
It was the latest in the series of release of funds as the default reaction whenever there is prolonged black out as a way to restore supply to a barely tolerable state.
“Following verification, ₦3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution”, Onanuga said, adding that “implementation has begun, with 15 power plants signing settlement agreements totalling ₦2.3 trillion.”
The reaction was swift. The Generating Companies (GenCos) asked the Presidency to explain how it calculated the reported ₦3.3 trillion debt, noting discrepancies between this figure and reconciled industry records.
They raised concerns about how the debt figure was calculated, saying it does not match the amounts agreed upon during earlier reconciliation meetings between market participants and government agencies.
Earlier on May 17, 2024, ₦3.3 trillion was announced to have been approved for the offsetting of sector debts. And on July 25, 2024, another ₦4 trillion bond was also said to have been approved to settle similar debts. It has been established that government institutions and agencies, including the Presidential Villa owe a significant portion of these debts.
This was latched on by Mr. Peter Obi, presidential candidate of the Labour Party in the 2023 election. “Were the previous approvals mere announcements without execution?” he queried, wondering if Nigeria’s power crisis has no end.
As admitted by Onanuga, the debts were accumulated between 2015 and 2025, a period that falls within the period the All Progressives Congress (APC) has been at the helm.
The situation and the nightmarish state of power supply in the country has led to repeated reference to the then candidate Tinubu’s promise while campaigning for the 2023 presidential election which he won.
He had declared that if he failed to deliver stable electricity, Nigerians should not re-elect him. Today, the reality is that power supply has worsened, to the extent that there are even discussions about disconnecting the Presidential Villa from the national grid and installing a comprehensive solar system at the cost of N10 billion.
Actually, the project began around July 2025, implemented by Julius Berger in partnership with companies like Bartum Energy as a pilot programme at the State House Medical Centre. Additionally N7 billion has been provided in the 2026 budget for the conversion.
Explaining the rationale for the debt payment, Onanuga stated that settling the debt is crucial to resolving the operational posed by accumulated money.
“This programme is not just about settling legacy debts. It is about restoring confidence across the power sector — ensuring gas suppliers are paid, power plants can keep running, and the system begins to work more reliably”, explained Olu Arowolo-Verheijen, Special Adviser on Energy to President Tinubu.
“It is part of a broader set of reforms already underway — including better metering and service-based tariffs that link what you pay to the quality of electricity you receive.
“The government is also prioritising power supply to businesses, industries, and small enterprises — because reliable electricity is critical to creating jobs, supporting livelihoods, and growing the economy”, the presidential spokesman explained.
As on previous occasions, throwing money into the system has been the default response to power challenges with no corresponding due diligence or transparency in accounting for the disbursed funds. Under the National Integrated Power Project (NIPP), over $16 billion is believed to have been sunk into the bid to improve power supply with little or no impact under the Obasanjo administration.
The NIPP projected was funded from the Excess Crude Account (ECA), a source that was challenged as illegal by various states.
The projects, which included 11 power plants managed by the Niger Delta Power Holding Company (NDPHC), have been plagued by allegations of mismanagement and failure to deliver expected power generation increases.
And when the installed generating capacity spiked to about 13,000 MW, the national grid is unable to consistently or efficiently evacuate all generated electricity, often failing to transport power generated by GenCos to consumers. The national grid frequently operates well below 5,000 MW, leading to routine grid collapses and widespread blackouts. Since June 2023, over 21 grid collapse has been recorded during which generation of electricity dropped to 0.00 MW.
In appointing Chief Adebayo Adelabu as Minister of Power, President Tinubu may have hoped that an effective strategy for fulfilling his pledge to make electricity available to Nigerians could have been worked. Unfortunately, Adelabu’s only legacy is to evolve a dubious tariff structure that graduated the amount paid by consumers based on their location.
By his infamous tariff bands, consumers who fell outside the prime Band A lost lost the right to complain as the fact that the amount of electricity they got was a reflection of what they paid under their band became a ready-made excuse for shutting them up.
However, the 2023 constitutional amendment fundamentally reforms Nigeria’s power sector by dismantling the federal monopoly, allowing states to regulate and invest in electricity generation, transmission, and distribution. This decentralization aims to increase competition, boost investment, and solve the national grid’s fragility by empowering states to create independent, state-specific markets.
By removing the limitation “not covered by a national grid system,” the amendment authorizes states to legislate on electricity within their borders regardless of existing federal infrastructure.
State governments can license private investors, encouraging mini-grid projects and larger, independent power projects (IPPs) to boost capacity.
The constitutional amendment, combined with the Electricity Act 2023, provide the legal framework for this shift, aiming to improve reliability by breaking the reliance on a single, overburdened national grid.
Although some states have initiated measures to take advantage of the leverage provided by the constitutional amendment, it may be challenging for them to take optimum steps at the time governance has taken a backstage with the politics of the 2027 general elections the dominant issue at all levels of government. Invariably, despite the removal of electricity from the Exclusive List, Nigerians may have to wait until June 2027 before states may initiate concrete and bankable measures that will take the country into the era of energy self sufficiency.
