Whereas a big relief may have spread across the country’s power sector, with the approval of N3.3 trillion by President Bola Tinubu in respect of paying off outstanding debts ranging between of N4 trillion and N6 trillion, owed power sector operators, and running from 2015 to date, several angles to the development have come into graphic relief. In one vein, some observers would wish the relief had come earlier. Their consideration remains the lost, real-time dividends for the Nigerian economy, which an earlier intervention by the President would have saved for the country and thereby even accentuated his Renewed Hope Agenda (RHA).
According to them, were such a relief availed the country earlier, the corresponding boost of the economy, would have trumped whatever propaganda initiatives that the president’s party – the All Progressives Congress (APC) is currently mustering to secure a monolithic vote for Tinubu’s second term bid. Essentially coming at a time of excruciating challenges for the citizenry with respect to paucity of electricity supply – courtesy of historical weaknesses and domestic incontinences in the Nigerian environment, as well as the recent squeeze on the global energy market, the bailout gesture literally amounts to little beyond a knee jerk response by the government, to the country’s energy woes. Many even see it as strategically timed to correspond with the commencement of political campaigns for 2027 polls, by the resident’s camp.
In another vein is the consideration of the gesture as out of place by several interests especially the Nigerian Labour Congress (NLC), which leadership is citing the history of the disturbing course of the country’s power sector reforms programme. Labour decries the gesture as throwing good money after junk ventures, courtesy of the incontinences associated with the acquisition through privatisation and management of these generating plants in 2013 by their new owners. As was not a secret much of the funds deployed for the purchase of the privatized assets, were loans from Nigerian banks. And as had been inevitable, the burden on these banks was soon to manifest as operational challenges to them with the Central Bank of Nigeria (CBN) intervening every now and then to bail out the ‘used’ banks from crises.
Yet, in spite of the various drawbacks cited by respective interests, the bailout gesture by Tinubu still offers significant relief to both operators in the sector as well as the citizens, as it promises hope of a breather for the country’s embattled electricity sector. According to the presidency, the bailout was for settling a wide range of creditor in the power sector who were owed between N4 trillion and N6.8 trillion as at the end of February 2026. The figure was eventually resolved at N3.3 trillion for the government to settle. Meanwhile this figure is still contested by the creditors as they seem to have been brow beaten to accept such.
Due to the fact that the debts had been accumulating since 2015, several power generators had even ceased operating due to financial pressures, relating to the failure of their customers to settle bills which led to the shut down of facilities. The most critical of such drawbacks was often the inability to pay for gas supplies. From records at least 16 of the nation’s 23 power plants were not supplying any power for a considerable period of time leaving the active ones confined to supply as low as 3,705 megawatts instead of the installed grid capacity of 10 megawatts.
This situation was corroborated by Joy Ogaji the chief executive officer of the Association of Power Generation Companies. “We cannot maintain the machines… if there is no money,” she had said in an interview. Clarifying further she pointed out that gas and transport services claim equivalent to 60% of their operating cost, even as gas-fired thermal plants generate about 70% of Nigeria’s electricity. Also, according to her, the financial crunch had been so severe with accumulated debt leaving many power-generation firms in a critical situation, as some took out loans to keep operating with others unable to pay even salaries. In some instances, the owners even put up personally assets as collaterals in order to stay in business. It is from such a perspective that the import of the Tinubu bailout for GENCOs with be better appreciated. It is indeed a lifeline not only for the operators but also for the entire country.
Placed in context, Nigeria which has more than 230 million people, has been dogged by power shortages for decades, with its total statutory generating capacity hovering statically below 4,000 megawatts and just over half of the population connected notionally to the national electricity grid. Empirically, as many as 92 million Nigerians are without access to electricity. Meanwhile as many as 22 million gasoline and diesel fired generators are spread across the country, producing between 35,000 and 40,000 megawatts, which is a multiple of the nation’s production limit.
This situation has a most debilitating impact on the nation’s economy as well as a despicable dent on the country’s image. This remains a far cry to the expected situation of electricity sufficiency of about 25,000 megawatts, as well as parity with other comparable African countries. By comparison, South Africa, which has 63 million people, can produce more than 10 times as much electricity as Nigeria currently does.
With the bailout from Tinubu, great expectations are now directed at the beneficiary companies to do the needful and save the country from the prolonged reign of darkness. While the implementation may take some time, the gesture should be enough to stimulate prompt and adequate responses by them to return to business.
Meanwhile the respective states that have taken advantage of the provisions of the Nigerian Electricity Act of 2023 which provides for decentralization of the sector, should continue with their plans in order to reconcile with the remediation initiatives in respect of the national grid, courtesy of the Tinubu bailout.
All we are saying is that at the end of the day let there be light in every nook and cranny of Nigeria.