As of August 22, 2024, the Nigerian Electricity Regulatory Commission (NERC) has revealed that four international bilateral customers—specifically from Benin and Togo—owe Nigeria a staggering total of $14.19 million for electricity supplied during the first quarter of 2024. Despite the significant sum, none of these customers have made any payments against the cumulative invoice issued by the market operator for services rendered in that period.
The foreign entities involved include Para-SBEE in Benin Republic, which owes $3.15 million, and Transcorp-SBEE in Benin, which owes $4.46 million. Additionally, Mainstream-NIGELEC in Togo has an outstanding balance of $1.21 million, while Odukpani-CEET in Togo owes $5.36 million.
In a report examined by our correspondent, NERC also highlighted that local bilateral customers within Nigeria had similarly failed to remit payments against a cumulative invoice of 1.86 million naira issued for services rendered in the same quarter. However, the report noted that some local and international bilateral customers did make payments during the quarter, addressing outstanding invoices from previous periods. Specifically, two international customers paid a total of $5.96 million, while eight local bilateral customers contributed 505.71 million naira toward debts incurred prior to the first quarter of 2024.
The commission expressed its concern regarding the ongoing payment indiscipline exhibited by both local and international bilateral customers. NERC anticipates that the market operator will take necessary actions in accordance with the market rules to mitigate this issue.
In a broader context, it was reported in May that international consumers had failed to remit approximately $51.26 million to Nigeria for electricity exported throughout 2023. This alarming trend is further underscored by reports indicating that bilateral power consumers neglected to remit around 7.61 billion naira to the Nigerian power sector during the same year.
The NERC condemned these payment failures as a serious issue that must be addressed, labeling it as payment indiscipline. This term refers to the consistent failure of these entities to meet their financial obligations, which affects the overall stability and efficiency of Nigeria’s power export operations. The Market Operator, which is part of the Transmission Company of Nigeria (TCN), is tasked with overseeing these transactions and ensuring compliance.
An analysis of the industry data revealed alarming figures for remittances in 2023. International consumers failed to remit $16.11 million, $11.97 million, $11.16 million, and $12.02 million for electricity supplied in the first, second, third, and fourth quarters, respectively.
As these countries owe significant amounts to Nigeria, the situation calls for urgent attention and action. The Federal Government is likely to engage in diplomatic discussions to resolve these outstanding debts while reinforcing the importance of adhering to payment agreements. This situation not only impacts Nigeria’s revenue but also poses a risk to the reliability and sustainability of electricity supply within the region.
In conclusion, the ongoing issue of unpaid debts by Togo and Benin highlights critical challenges within the Nigerian electricity supply sector, necessitating immediate action to ensure compliance and foster better financial practices among international partners. Without addressing these payment discrepancies, the long-term viability of electricity export from Nigeria could be jeopardized, affecting both economic relations and energy security in the region.
