News of President Bola Tinubu’s plan to raise a N725 billion bond to offset debts owed electricity generating companies (Gencos), who in turn, are indebted to gas suppliers is drawing mixed reactions in Nigeria’s embarrassing “power-less” economy. The new bond will bring total intervention for settling what is known as electricity legacy debt to power producers to N1.23 trillion since the beginning of this year.
Government has placed a cap of N4trillion on what it is willing to pay for the backlog of debts. Meanwhile, the Association of Power Generation Companies (APGC) has estimated debt owed at about N7.66 trillion as of June 2026, with the N501 billion Series 1 bond representing only 7.37 per cent of the N6.8 trillion legacy debt accumulated between 2015 and 2024. The body even warns that the total debt could balloon to N17 trillion by 2033 if left unresolved.
Nigeria’s total power output capacity is still a measly 12, 000 MW for an economy energy experts reckon to require at least triple that figure, even in its current, heavily de-industrialised state. The ludicrously low capacity is testament to how the country has been badly governed since the attainment of political Independence in 1960. More ignominious, the country’s power industry has hardly ever surpassed a peak real supply of 4.5MW to the economy in spite of a litany of past “reforms” and interventions announced with so much pomp and glee.
Keen to win the confidence of Nigerian voters barely a year after taking up Nigeria’s highest political office in 2023, President Tinubu pledged to fix the country’s chronic, egregiously flawed Nigerian Electricity Supply Industry (NESI) with an unprecedented declaration: “You will have constant electricity and you will not pay estimated bills”, he promised. “Don’t vote for me in the next election if you don’t get good, reliable supply”.
That pronouncement raised the hope of a population absolutely frustrated by the power sector’s near total failure to power the economy and households despite successive governments sinking of tens of billions of dollars to provide adequate, stable electricity.
Less than a year to the next polls, Nigerians from all spheres of life say it is time to take President Tinubu to task on his own pledge. The media – orthodox and social – is abuzz with calls for him to make good his pledge to provide the country with adequate electricity, not just to make life bearable for citizens, but to power an economy whose potential has been undermined by years of dumb policies, underinvestment and blatant corruption in the power supply industry.
The Presidential Power Debt Reduction Programme is President Tinubu’s way to fulfilling his self-imposed vow to fix Nigeria’s chronic economy-damaging electricity supply gap.
Finance Minister, Taiwo Oyedele, explains why the President has chosen this path. “The Nigerian Electricity Supply Industry”, he said, has “struggled under persistent tariff shortfalls, settlement gaps within the bulk electricity trading framework, accumulated debts to generation companies and their suppliers, and grid instability, constraining investment and weakening sector performance”. These are problems the Administration, he believes, cannot solved by budgetary allocation alone, hence the “structural, market-based solutions”. The upcoming N725 billion bond as well as future issues offer will up Government’s N4 trillion ceiling for disbursement to sundry creditors on the power industry.
Joseph Tegbe, Minister of Power agrees with Oyedele that resolving the liquidity crisis in the electricity market is critical to achieving reliable power supply and sustainable economic growth. It is also the way to pull more private sector investors participants such as insurance and pension funds into the undercapitalised electricity market.
The irony of the entire power sector debt offsetting programme, however, is that it only addresses past obligations, not immediate issues of the upgrading of decrepit infrastructure and weak, incompetent operators at the distribution leg of the value chain.
Analysts, observers and frustrated consumers are tired of complaining about the blatant technical incapacity of current operating companies to carry out sorely needed upgrades in all aspects of power service delivery. These include maintenance of equipment; reliable record keeping, fair and accurate billing, effective public relations and communications.
Critics wave off the power debt reduction programme as nothing more than a palliative, a political fix, with a time horizon not further than the impending 2027 general elections. They accuse the Tinubu Administration of seeking only to temporarily quell the people’s just agitation over his pledge to fix the country’s totally untenable power supply and delivery architecture. The APGC’s dissatisfaction with the pace and extent of the programme and Nigeria’s power policy informs its foreboding of a humongous debt mountain in the coming years.
The upshot? Critics and analysts have sounded their own alarm; Not much can come out of this rushed debt payment scheme, if the current administration returns to political power in 2027; expect a return to the status quo – a fall back to Nigeria’s position and reputation as the “Generator economy of Africa”.