Nigeria is asserting that it is owed over $11 million by Benin and Togo for electricity supplied in the first quarter of 2025. This claim comes from the Nigerian Electricity Regulatory Commission (NERC), which has underscored the growing tensions in cross-border energy transactions.
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Despite having established bilateral agreements that ensure a consistent supply of power to its neighbors, the payment behavior of these countries has been less than encouraging. Intriguingly, while Togo has failed to make any payments, Benin has only partially settled its debts. Together, these shortfalls contribute to a staggering combined debt exceeding $11 million. How did we arrive at this situation, and what does it mean for the future of energy transactions in West Africa?
For the first quarter of 2025, Nigeria invoiced six international electricity customers a substantial $17.24 million. However, the actual amount recovered was only $5.8 million—merely 34% of what was owed. This staggering contrast between invoiced amounts and actual payments raises a poignant question: What lies at the heart of these defaults and underpayments?
Among the six invoiced entities, Togo was notably the only country that has not honored its obligations, while Benin has made some payments but fell significantly short. With the massive shortfall from both of these nations, concerns about the overall viability of Nigeria’s energy sector have been magnified. It seems we are witnessing a classic case of promise versus performance.
Echoing these sentiments, Punch NG recently reported that domestically, some industrial clients have managed to pay their electricity bills in full. However, many others are defaulting or making only partial payments, resulting in an accumulation of outstanding invoices valued in the hundreds of millions of naira. This duality highlights a broader issue in the power supply ecosystem that deserves our attention.
Nigeria’s Regulatory Body and Its Concerns
NERC has expressed serious concerns regarding the chronic issue of payment defaults, particularly among major government-owned entities. Labeling this as a long-standing problem, they have called for urgent reform. The pressing need for change raises a critical conversation point: How can both governmental bodies and private enterprises work together to foster a more reliable payment culture?
According to NERC, the poor payment culture existing among these countries jeopardizes the financial stability of Nigeria’s power market. The consistent failure to meet payment obligations not only undermines trust in bilateral agreements but also poses a threat to the future of regional energy security.
Experts are now warning that unless robust enforcement mechanisms are established, defaults—both local and cross-border—will deter future investments. This could exacerbate liquidity issues for generation and transmission companies. What will it take to inspire confidence among investors who hold the key to revitalizing this crucial sector?
As energy demands rise steadily across West Africa, Nigeria’s role as a power exporter is under scrutiny. The pressures of ensuring that payment terms are honored are mounting. The question lingers: How can Nigeria position itself as a reliable partner in energy export amidst these financial challenges?
This situation is a telling reminder that while energy may be a universal need, the pathways to its equitable distribution can be fraught with complexities. The stakes are high, and the ramifications of inaction extend beyond current debts; they touch on the well-being of nations and the promises of economic growth.
In conclusion, the challenges Nigeria faces are emblematic of broader issues within regional energy markets: the necessity for trust, reliability, and accountability. As Nigeria persists in tackling these challenges, one thing is clear: proactive measures will be essential to ensure a sustainable and prosperous energy future for West Africa.
Edited By Ali Musa
Axadle Times International – Monitoring.
