Nigeria’s Neighbors Default on $8.8 Million Power Debt as Collection Challenges Persist
Abuja, January 2024 – New regulatory data reveals Nigeria’s ongoing struggle to collect payments for electricity exports, with neighboring Benin Republic and Togo accumulating $8.84 million in unpaid power bills during the last quarter of 2024.
The Nigerian Electricity Regulatory Commission (NERC) quarterly report shows only 37% of invoices issued to international customers were settled, continuing a pattern of payment defaults that strains the country’s power sector finances.
International Payment Defaults
• Benin Republic’s Paras-SBEE: 2.65millionoutstanding•Transcorp−SBEE(Ughelliline):1.88 million unpaid
• Togo’s Odukpani-CEET: $2.37 million in arrears
Mainstream-NIGELEC stood as the sole international customer to fully honor its $2.6 million obligation.
Domestic Collection Improvements
On the home front, power distributors showed modest progress:
• 77.44% collection rate (₦509.84 billion of ₦658.4 billion billed)
• 2.89% improvement from previous quarter
However, chronic non-payment issues persist with:
• Ajaokuta Steel Company’s ₦1.38 billion debt
• Multiple bilateral customers carrying forward arrears
Sector Implications
Energy analysts highlight these unpaid bills exacerbate Nigeria’s power sector liquidity crisis, potentially affecting:
- Grid maintenance and expansion projects
- Generation companies’ ability to pay gas suppliers
- Nigeria’s position in regional power trade agreements
NERC has referred the Ajaokuta debt to federal authorities while considering stronger enforcement mechanisms for international collections. The commission maintains that improved metering and customer engagement contributed to the domestic collection gains.
Looking Ahead
The report comes as Nigeria prepares to renegotiate terms with West African Power Pool members, seeking more reliable payment structures for cross-border electricity sales that totaled $14.05 million in Q4 2024.
Industry observers suggest Nigeria may need to implement prepayment systems or reduce supply to chronic defaulters to protect its energy sector finances. The situation underscores the challenges of regional power integration amid varying national payment capacities.
