President Bola Tinubu’s approval of a ₦3.3trn payment plan to settle long-standing debts in Nigeria’s electricity sector has been backed by the Chairman of the House Ad-Hoc Committee on the Power Sector, Hon. Ibrahim Al-Mustapha Aliyu, who said the funding is already captured under previously approved borrowings.
Aliyu, speaking to Daily Trust on Tuesday, explained that the Federal Government does not require fresh legislative approval for the debt settlement, as the National Assembly had earlier approved sectoral loans covering the energy sector.
He said, “I believe that because of the approval given the National Assembly of the various sectoral borrowings and the energy sector is one of those that were captured in the various loans that the National Assembly approved to the sum of about $5bn. The energy sector activation and intervention is part of the borrowing plans.”
According to him, this means the ₦3.3 trillion debt payment is effectively being financed through loans already authorised by lawmakers.
He added, “The government does not need another approval from the National Assembly to approve the debt payment.” Aliyu further justified the payment on contractual grounds, noting that the Federal Government had entered into binding agreements with power generation companies.
“The agreement the FG entered into with the GenCos, they are private investors and they need guarantees and the government gave them guarantees on behalf of Nigerians. They generate electricity and whether we use it or not, we have to pay them,” he said.
Under the Presidential Power Sector Financial Reforms Programme, the Federal Government said it has verified ₦3.3trn as a “full and final settlement” of legacy debts accumulated between February 2015 and March 2025.
In a statement recently, the presidency noted that 15 power plants had signed settlement agreements valued at ₦2.3trn, while the government has raised ₦501bn so far to fund the process. Of this amount, ₦223bn has already been disbursed, with further payments underway.
According to the Presidency, the intervention is designed to ensure that funds flow across the electricity value chain, particularly to generation companies and gas suppliers, thereby stabilising electricity generation and improving supply reliability.
Also speaking with Daily Trust, Executive Director of the Electricity Consumer Protection Advocacy Centre, Chief Princewill Okorie, said the intervention may not resolve Nigeria’s electricity challenges without addressing deeper systemic issues.
“This is neither the first nor will it be the last time funds are injected into the power sector. Over the years, significant amounts of money have been committed by successive administrations. But where is the measurable impact? How was this new figure even determined, given the persistent opacity in the sector?” he said.
Okorie pointed to inconsistencies in gas supply claims among operators.
“You hear generation companies (GenCos) complaining about inadequate gas supply, yet gas producers insist they are supplying sufficient volumes. At the same time, GenCos deny receiving enough gas. So, who is telling the truth?” he added.
He also raised concerns about constitutional and governance issues within the sector.
“When you examine the sector more broadly, deeper structural issues emerge. The electricity industry appears to have evolved in ways that conflict with several constitutional provisions,” he said.
On enforcement, he noted that “We also hear repeated claims about vandalism and electricity theft. However, enforcement remains weak. If penalties exist but are not applied, what deterrent effect do they really have?”
While the Federal Government maintains that settling the debts will improve liquidity and stabilise electricity supply, analysts warn that structural challenges in transmission and distribution remain unresolved.