Let’s break this down so it makes sense 👇
1️⃣ The Big Issue
Power generation companies (GenCos) said the Federal Government has owed them ₦6 trillion in unpaid electricity subsidies since 2010.
President Bola Tinubu said:
“Not so fast. We will audit it first.”
After checking the books, the government says the real debt is ₦2.8 trillion, not ₦6 trillion and that’s all they’re willing to pay.
2️⃣ Why Does Government Owe Them?
Electricity tariffs have been kept lower than the real cost of producing power.
So:
- It costs more to generate electricity
- Consumers pay less
- Government covers the difference (subsidy)
Over time, that unpaid difference piled up into trillions.
3️⃣ Why Didn’t Government Just Pay the ₦6tn?
Because the President suspected the amount might be inflated similar to what happened during fuel subsidy issues in the past.
So he ordered:
- A joint audit by Finance Ministry, NBET & GenCos
- Verification of all claims
Result: ₦2.8tn was confirmed as legitimate.
4️⃣ Has Government Started Paying?
Yes.
- ₦501 billion has already been paid through a government bond.
- Another ₦600 – ₦800 billion will be paid soon.
- The rest will be spread over 12 – 24 months.
Government says this will help power companies stay afloat and avoid shutdowns.
5️⃣ But There’s a Condition
Government is not just handing over the money freely.
It says:
- Part of the ₦2.8tn must go to pay gas suppliers (because unpaid gas bills cause power plants to shut down).
- Part must be invested in fixing and upgrading infrastructure.
- Companies must show proof of investment.
In simple terms:
“You can’t collect trillions and still complain about poor infrastructure.”
6️⃣ Why Is Labour Angry?
The Nigeria Labour Congress argues:
- These companies bought electricity assets for about ₦400bn during privatisation.
- Power supply has not significantly improved (still unstable).
- So why should government pay them trillions?
They see it as rewarding poor performance.
7️⃣ The Real Problem
Nigeria’s power sector has been struggling since the 2013 privatisation:
- Tariffs don’t cover full cost.
- Companies lack liquidity.
- Gas suppliers aren’t paid.
- Infrastructure isn’t upgraded enough.
- Consumers sometimes even buy transformers for private companies.
What This Means for Nigerians
- Government is trying to prevent total collapse of the power sector.
- It wants accountability before paying.
- It’s trying to ensure money goes into fixing the system not into private pockets.
But the big question remains:
Will this ₦2.8tn payment finally improve electricity supply?
That’s what Nigerians are waiting to see.
