President Bola Tinubu is expected to meet with power generation companies (GenCos) over a mounting N4 trillion debt threatening to cripple Nigeria’s electricity sector, the Minister of Power, Adebayo Adelabu, said on Sunday.
Mr Adelabu, in a statement released by his media aide, Bolaji Tunji, said the meeting with the GenCos would focus on finding a workable solution, (including removing electricity subsidy), to the debt and stabilizing the country’s ailing power sector. He warned of “an impending collapse” in the sector if immediate action is not taken.
“We recognize the urgency of this matter,” Mr Adelabu said. “The government is committed to resolving this debt to stabilize the sector and prevent further crisis.”
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He said the federal government would prioritize a “significant” cash payment to the GenCos, with the balance of the N4 trillion to be cleared through promissory notes and other financial instruments within six months. The minister also said the government would implement structural reforms to address operational inefficiencies and push for a fully liberalized market.
“Citizens must pay the appropriate price for the energy consumed,” he said. “The Federal Government will continue to provide targeted subsidies for economically disadvantaged Nigerians, but we must realize that our economy cannot sustain blanket subsidies indefinitely.”
However, the plan is drawing strong criticism from citizens who argue that the rising cost of living has already left households and businesses stretched thin. Following the removal of the petrol subsidy in 2023, inflation soared, eroding earnings and increasing the cost of goods and services. For many Nigerians, electricity subsidy remains the only direct benefit they receive from the government—one now at risk of becoming unaffordable.
There is also skepticism over whether the removal of the electricity subsidy will improve power supply. Critics point to the government’s recent Band A tariff model, under which customers receive 20 hours of electricity and pay a higher rate, as an example of failed promises.
Amid the growing backlash, calls for the government to look inward and reduce the cost of governance have gained momentum. Economist Kalu Aja captured public frustration, arguing that Nigeria’s governance structure is too extravagant to justify further demands from already overburdened citizens.
“If Nigeria can’t afford to maintain electricity tariffs, then the subsidy in the National Assembly, Governors and the Presidency must also be removed,” he said. “Nigeria can’t afford a presidential system of governance with President, VP, Senate and House plus 36 Governors with State Senate and House. Nigeria should revert to a parliamentary system, with Ministers as members of one House, for a start. Citizens alone can’t cut their coats.”
Many Nigerians have echoed this sentiment, protesting the high cost of governance in Nigeria, believed to be among the most expensive in the world.
The GenCos, who were represented at the meeting by Col. Sani Bello (Rtd), chairman of Mainstream Energy Solutions and the Association of Power Generating Companies, noted that persistent liquidity shortfalls have hampered their ability to maintain infrastructure or service loans.
“Without urgent intervention, the entire power ecosystem could collapse,” Bello said.
Kola Adesina, chairman of Egbin Power and First Independent Power Limited, described the situation as a national emergency. He said stable electricity is essential to the survival of homes, industries, and health facilities.
Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies, blamed chronic payment defaults, erratic gas supply, and foreign exchange instability for the crisis. She said the depreciation of the naira—from N157 to a dollar in 2013 to N1,600 in 2024—has severely limited the GenCos’ ability to service debt and invest in infrastructure.
“GenCos have borne unsustainable risks from grid failures to unproductive taxes while remaining patriotic,” she said.