Nigeria’s electricity sector is under increasing financial pressure as three neighbouring West African countries, Benin, Niger, and Togo, have reportedly defaulted on payments exceeding $40 million for electricity supplied to them by Nigeria.
According to sector insiders, the outstanding debts are linked to international bilateral energy supply agreements facilitated through the Nigerian Bulk Electricity Trading Company (NBET) and the Transmission Company of Nigeria (TCN). These countries, which rely significantly on Nigeria for power supply through the West African Power Pool arrangement, have fallen behind on payment schedules, exacerbating revenue shortfalls within Nigeria’s already strained electricity value chain.
Industry experts warn that the mounting debts are placing additional burdens on Nigeria’s power infrastructure and finance system, as the country continues to struggle with its own domestic challenges, including grid instability, low tariff recovery, and high operational losses. The development, they say, undermines the ability of the TCN and generation companies to invest in upgrades and maintain a reliable supply to both local and regional customers.
A senior official within Nigeria’s power sector noted that despite repeated reminders and diplomatic efforts, the debtor countries have yet to show substantial commitment to clearing the backlog. “These arrears are impacting liquidity and threatening the sustainability of Nigeria’s international power commitments,” the official added.
Analysts are now calling on the Federal Government to enforce stricter terms in future cross-border electricity deals and ensure prompt payments to protect Nigeria’s energy resources and economic interests.
