The Federal Government of Nigeria has earmarked N15 billion in the proposed 2025 budget to address electricity bill arrears owed by ministries, departments, and agencies (MDAs). It is unclear whether this allocation will fully or partially settle the outstanding debts.
Electricity Distribution Companies (DisCos) have consistently raised concerns over the growing debts owed by government agencies at both state and federal levels, which they claim hinder the growth of the power sector.
Government Owes Significant Debts
Earlier this year, the Executive Director of the Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan, revealed that MDAs collectively owed about N100 billion in electricity bills. He disclosed this during a February 2024 interview with Arise News.
Mr. Oduntan’s comments came shortly after President Bola Tinubu directed the immediate clearance of the Presidential Villa’s outstanding electricity bill, following an account reconciliation meeting between the State House Management and the Abuja Electricity Distribution Company (AEDC). The Presidency confirmed the outstanding debt stood at N342.3 million.
Speaking on the broader issue, Mr. Oduntan emphasized the importance of government agencies paying their electricity bills, stating:
“Debts stifle the growth of the electricity sector. Government agencies must not be found wanting in this regard. Everyone must play their part, including the government, to create an enabling environment for businesses to thrive.”He dismissed any notion of political bias, clarifying that the issue of unpaid debts predated the current administration.
“We’ve been raising this issue for a long time. The debt didn’t start in May 2023. There is no mischief here, just facts and solutions,” he added.AEDC Reveals Over N47 Billion in Outstanding Debt
Despite reported efforts to clear debts, the AEDC announced in June 2024 that MDAs, the Presidential Villa, and the Nigerian Army Headquarters collectively owed over N47 billion in unpaid electricity bills.
The company issued a 10-day ultimatum to 86 MDAs, warning of potential disconnection if payments were not made. According to the AEDC’s public statement, the breakdown of some of the debts is as follows:
• Nigerian Army: N12 billion
• Nigerian Police Force: N1.3 billion
• Presidential Villa: N923 million
• FCT Ministry: N7.5 billion
• Ministry of Finance: N5.4 billion
• Ministry of State Petroleum: N2.1 billion
• Ministry of Education: N1.8 billion
• Central Bank Governor: N1.5 billion
• Ministry of Health: N1.1 billion
• Clerk of the National Assembly: N1.09 billion
• Niger State Governor’s Abuja Liaison Office: N3.4 billion
• Kogi State Governor’s Abuja Liaison Office: N1.3 billion
This mounting debt, according to industry experts, continues to be a major hurdle in achieving stability and growth in the electricity sector.
Challenges Persist
Despite allocating N15 billion in the 2025 budget, the Federal Government faces significant pressure to address the remaining debts and ensure MDAs comply with payment obligations. Stakeholders argue that without consistent payments, the electricity sector will struggle to achieve the desired efficiency and reliability, hindering Nigeria’s broader economic goals.