President Bola Ahmed Tinubu has approved a ₦3.3 trillion payment plan to settle longstanding debts in Nigeria’s power sector, a move designed to restore reliability, boost investor confidence, and stabilise electricity supply across the country.

The approval, announced by presidential spokesperson Bayo Onanuga, follows a comprehensive review of legacy debts accumulated between February 2015 and March 2025 under the Presidential Power Sector Financial Reforms Programme.

“Following verification, ₦3.3 trillion has been agreed as a full and final settlement, ensuring a fair and transparent resolution,” the statement said.

The government says implementation is already underway, with 15 power generation companies signing settlement agreements valued at ₦2.3 trillion. So far, ₦501 billion has been raised, with ₦223 billion already disbursed as part of the plan.

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According to the Special Adviser on Energy, Olu Arowolo-Verheijen, the initiative goes beyond debt repayment to address systemic inefficiencies in the sector.

“This programme is not just about settling legacy debts. It is about restoring confidence across the power sector, ensuring gas suppliers are paid, power plants can keep running, and the system begins to work more reliably,” she said.

She added that the reform package includes improved metering systems and service-based tariffs that link electricity costs to the quality of supply.

“It is part of a broader set of reforms already underway, including better metering and service-based tariffs that link what you pay to the quality of electricity you receive.

“The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians.”

The presidency noted that clearing the debt backlog will enhance liquidity across the power value chain, ultimately improving electricity generation and service delivery nationwide.

Powering Growth in Africa’s Largest Economy

Nigeria’s power sector has long struggled with structural challenges, including low generation capacity, frequent grid collapses, and persistent outages.

According to a 2024 report by Africa Trade Barometer, the country loses an estimated $26 billion annually due to electricity shortages, with businesses spending an additional $22 billion on alternative energy sources such as generators.

“Economic losses arising from Nigeria’s electricity shortages are estimated to be USD 26 billion annually, without accounting for spending on fuel for off-grid generators, which is estimated to be a further USD 22 billion,” the report by Standard Bank said.

“In Nigeria, surveyed businesses must contend with a national grid that frequently collapses as it fails to meet a daily peak demand which is nearly four times its generation capacity,” it added.

These constraints have weighed heavily on economic growth, particularly for small and medium-sized enterprises that rely on stable electricity to operate efficiently.

There have been reform efforts by the Federal Government, including initiatives to improve metering, restructure tariffs, and prioritise power supply to industries—steps aimed at unlocking productivity and supporting job creation.

In a country where the hum of generators often replaces the promise of steady electricity, Nigeria is attempting a decisive reset. From bustling city markets to industrial hubs, power has long defined the rhythm of productivity.

For a country seeking to position itself as a leading investment destination in Africa, reliable electricity remains a critical enabler.