Nigeria's Power Sector Faces ₦12 Billion Debt Crisis from Neighboring Countries
New data from the Nigerian Electricity Regulatory Commission (NERC) reveals that three West African nations – Benin Republic, Togo, and Niger – have accumulated a substantial electricity debt of $9.55 million, equivalent to approximately 12 billion naira, for power supplied during the fourth quarter of 2025. This outstanding payment represents a significant revenue gap for Nigeria's already troubled power sector.
International Payment Performance Falls Short
According to the NERC Quarterly Report for Q4 2025, Nigeria issued a total invoice of $20.44 million to the three neighboring countries for electricity exports during the period. However, only $10.89 million was actually remitted, resulting in a disappointing payment performance of just 53.28 percent. This means that for every $100 billed to these international customers, only $53.28 was paid, leaving a substantial $46.72 unpaid per hundred dollars.
The report explicitly stated: "The three international bilateral customers being supplied by GenCos in the Nigerian electricity supply industry made a payment of $10.89m against the cumulative invoice of $20.44m issued by the MO for services rendered in 2025/Q4, translating to a remittance performance of 53.28 per cent."
Wide Variation in Payment Patterns Across Contracts
The payment performance varied dramatically across the six different international bilateral contracts:
- Paras-SBEE in Benin paid $1.67 million of their $2.45 million invoice (68.16%)
- Paras-CEET in Togo remitted $1.46 million against a $2.18 million bill (64.97%)
- Transcorp-SBEE (Ughelli) in Benin recorded one of the poorest performances, paying only $0.46 million of their $3.74 million invoice (12.30%)
- Transcorp-SBEE (Afam 3) in Benin performed significantly better with $3.21 million paid of $3.90 million invoiced (82.31%)
- Mainstream-NIGELEC in Niger, despite receiving the highest invoice of $5.96 million, paid $4.09 million (68.63%)
- Odukpani-CEET in Togo recorded the absolute worst performance, making zero payment on their $2.18 million invoice (0.00%)
Domestic Customers Show Better Payment Discipline
While Nigeria struggled to collect payments from neighboring countries, domestic bilateral customers demonstrated stronger financial responsibility. According to the NERC report, domestic customers made cumulative payments of N3.5 billion against invoices totaling N4.17 billion for services rendered in Q4 2025, translating to an 84.23 percent remittance performance.
This means local customers paid approximately 84 kobo for every naira billed, representing a much healthier payment rate compared to their international counterparts. However, not all domestic customers met expectations, with Ajaokuta Steel Company – classified as a special customer – failing to remit any payment on their N1.26 billion invoice during the period.
Historical Payments and Ongoing Challenges
The NERC report noted that one international customer and one domestic bilateral customer made payments for outstanding invoices from previous quarters. Specifically, Société Béninoise d'Energie Electrique paid $3.54 million for outstanding invoices from Ughelli ($1.86 million) and Afam 3 ($1.67 million), while APLE contributed N141.14 million toward previous quarters' invoices.
All remittance data in the report is based on reconciled market settlement submitted to the commission as of April 2, 2026. This development highlights the persistent challenge Nigeria faces: continuing to export electricity to neighboring countries despite experiencing power shortages domestically, while simultaneously struggling to recover full payments for these exports.
For Nigeria's electricity generators, the $9.55 million debt for just one quarter represents yet another revenue gap in an already strained power sector. The situation raises questions about the sustainability of current energy export arrangements and their impact on Nigeria's domestic power availability and financial stability.
