Nigeria’s power sector has long been plagued by structural inefficiencies, weak liquidity and persistent non-performance across the value chain. The Federal Government is confronting an estimated ₦6.5 trillion subsidy-related debt burden while attempting to stabilize a sector that remains critical to economic growth. Recent communications from the Office of the Special Adviser on Energy suggest a strategic pivot toward fiscal discipline through the Presidential Power Sector Debt Reduction Programme (PPSDRP).
The Accountability Gap
A recent tripartite audit involving the Ministry of Finance and the Nigerian Bulk Electricity Trading Plc (NBET) has become a focal point for accountability. Generation Companies (GenCos) had initially claimed over ₦6 trillion in legacy receivables. However, the Presidency’s verification process validated only about ₦2.8 trillion, effectively reducing the claim by more than 50 percent. This development highlights the importance of forensic reconciliation to ensure that public funds are not used to settle inflated or unsubstantiated obligations. In a sector historically associated with opaque settlements, this level of scrutiny represents a significant shift.
Settlement Progress
As of late January 2026, the Federal Government issued an inaugural ₦501 billion bond to begin clearing verified receivables. The settlement framework requires participating GenCos to sign binding agreements tied to a phased payment plan. Five major operators including Geregu Power Plc, Transcorp Power and the Niger Delta Power Holding Company (NDPHC), collectively representing 14 power plants have already signed.
The Path Forward
Whilst the federal government has already identified the need to tackle the transmission company debacle, for these payments to translate into improved electricity supply, transparency must remain central. Government must resist pressure to settle unverified claims while ensuring that disbursements are tied to guaranteed gas supply and measurable grid performance.
This is a welcome development that deserves recognition. In a country where public finance are often viewed with suspicion, rigorous audits similar to the same action on outstanding forex liabilities, signal a growing commitment to accountability. This does not only encourages transparency but also reinforces the message that Nigeria is possibly moving in the right direction.
Akt writes from Lagos