Benin Republic, Niger and Togo Owe Nigeria N22.55bn Electricity Debt
- Nigeria's West African neighbours are deep in debt from unremitted payments of electricity supplied in five years
- This huge amount of unpaid bills is detrimental to the smooth functioning of the power sector
- Distribution companies have to incur significant losses due to the failure of the consumers to pay their electricity bills.
Three of Nigeria's West African neighbours - Republic of Benin, Niger and Togo owe the Nigerian Bulk Electricity Trading Company Plc and the power market operator the sum total of N22.55 billion in electricity bills.
This is according to quarterly reports and sales records data provided by Nigerian Electricity Regulatory Commission.
It should be restated that Nigeria exports electricity to Benin Republic, Niger and Togo through Paras-SBEE, Transcorp-SBEE and Mainstream-NIGERLEC, respectively.
Source: UGC
Breakdown of unremitted payment for electricity supplied in five years
According to the data, the firms were billed N50.01 billion in 2018, but only N9.62 billion was collected.
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While an invoice of N30.03 billion was sent to the firms in 2019, only N56.94 billion was collected.
In 2020, N16.22 billion invoice was issued, but collection was no more than 12.06 billion.
For 2021, the firms were issued an invoice amounting to N7.67 billion, but only N2.9 billion was eventually received by Nigeria.
2022 seemed like an improvement as N4.62 billion was collected from an issued bill of about N4.66 billion.
A Debt Crisis of National Proportion
The power distribution companies, commonly known as DisCos, have been struggling with the massive debt accumulation for years.
They've tried everything, from disconnection of defaulters to the introduction of pre-paid meters. But the debt keeps growing, and it has now reached a dangerous level that threatens the stability of the power sector.
This huge amount of unpaid bills is detrimental to the smooth functioning of the power sector and has led to widespread blackouts, leaving many households without electricity for days.
The DisCos have raised concerns over the dire situation, and the Nigerian Electricity Regulatory Commission has warned the defaulters to pay up or face disconnection.
Breakdown of DisCos billings to Nigerian consumers in 5 years
In Nigeria, the DisCos' revenue shortfall has increased by over N1tn in the last four years, causing a significant setback in the power sector.
The data shows that out of N4.30 trillion that customers were billed, the companies were only able to collect N2.92 trillion from 2019 to 2022.
A further breakdown showed that in 2018, the Discos billed Nigerians N690.2 billion and were only able to collect N442.3 billion.
N730.88 billion was billed to Nigerian consumers in 2019, while only 483.65 was recouped.
It was the same story in 2020 where N816.16 billion in 2020, while N542.73 billion was collected.
For 2021 and 2022, Nigerian consumers were billed N1.1 trillion and N840.18 billion with respective reimbursement of N771.3 billion and N596.63 billion.
The distribution companies have to incur significant losses due to the failure of the consumers to pay their electricity bills. This has led to a vicious cycle where the DisCos struggle to pay their debts, which leads to a reduction in power supply, which in turn affects the consumers.
FG Disconnects DisCos from National Grid Over Massive Debt
In a related news, Legit.ng reported that the Federal Government has commenced a nationwide disconnection of some electricity distribution companies (DisCos) from the national grid.
The move comes after the government repeatedly warned the DisCos to pay their outstanding debts. Unfortunately, the companies failed to heed the warnings, resulting in the government taking a drastic step to address the situation.
As a result, millions of Nigerians may be plunged into darkness in the coming weeks as the FG takes a firm stance against the country's defaulting electricity distribution companies.
The defaulting DisCos include Benin Electricity Distribution Company, Kaduna Electric, Enugu Electricity Distribution Company, Port Harcourt Electricity Distribution Company and Abuja Electricity Distribution Company.
Others are Ikeja Electric, Kano Electricity Distribution Company, Ibadan Electricity Distribution Company, APL Electric Company Aba, and Jos Electricity Distribution Company.
Two GenCos - Paras Energy and Niger Delta Power Holding Company plants are also listed among the debtors.
Source: Legit.ng
