ABUJA (Sundiata Post) – Nigeria’s financial challenges have taken another hit as international customers failed to settle a whopping $14.19 million electricity bill for the first quarter of 2024.
The alarming revelation sprang from the Nigeria Electricity Regulatory Commission’s (NERC) Q1 2024 report, which highlighted the persistent non-payment by all four of Nigeria’s international electricity customers.
The customers, comprising neighbouring countries such as Benin Republic, Niger, and Togo, have left Nigeria’s Market Operator (MO) with a substantial unpaid debt.
Analysts noted that the worrisome development remains a lingering issue that must be urgently addressed, as international clients’ repeated failure to honour their financial obligations would continually drain Nigeria’s purse.
The NERC report also shed light on a similar pattern within Nigeria. Domestic bilateral customers, who were billed a total of N1.86 billion for the same period, have also defaulted on their payments. The report clearly states, “In 2024/Q1, none of the four (4) international bilateral customers serviced by the MO made any payment against the $14.19 million invoice issued to them by the MO for services rendered in 2024/Q1. Similarly, none of the bilateral customers within the country made any payment against the cumulative invoice of N1,860.11 million issued to them by the MO for services rendered in 2024/Q1.”
However, the report does note some progress in clearing previous debts. Two international customers managed to pay approximately $5.19 million, while eight domestic customers settled about N505.71 million from past quarters. Although this is a step forward, the recurring failure to meet current payment obligations continues to strain Nigeria’s already troubled financial landscape.
On the domestic front, Nigeria’s Distribution Companies (DisCos) were billed a staggering N114.12 billion for upstream services in Q1 2024. This amount covers N65.96 billion for generation costs and N48.16 billion for transmission and administrative services. Despite this significant billing, the DisCos managed to remit N110.62 billion, leaving a shortfall of N3.50 billion. Nevertheless, their remittance performance of 96.93 per cent marks a notable improvement from the 69.88 per cent recorded in the previous quarter, reflecting a more concerted effort to address the financial bottlenecks within the sector.
Yet, the problem of unpaid international electricity debts looms large. In 2023, the federal government reported an outstanding $51.26 million owed by international customers for electricity exported from Nigeria.
To mitigate this, the government in May 2024 issued a directive limiting the supply of electricity to international customers to no more than 6 per cent of the total grid generation per hour.
In addition, the Nigerian Electricity Regulatory Commission (NERC) has criticized the ongoing practice of prioritizing international customers over local distribution companies (DisCos) during grid imbalances. The commission called this approach both inefficient and unfair, demanding a recalibration of priorities. Under a new order, electricity generation companies are now required to allocate no more than 10 per cent of their generation capacity to international off-takers over the next six months.
As Nigeria navigates these turbulent waters, the unresolved debts, both international and domestic, threaten to undermine the stability of the nation’s electricity sector, further exacerbating the country’s broader financial woes.
