Gas-rich Nigeria goes dark as power gets zero funding

…N531bn budgeted, zero released

…FG’s unpaid invoice over N6trn- GenCos

Nigeria holds one of the world’s largest untapped energy treasures, yet its citizens remain in the dark. While the nation sits on an estimated 600 trillion cubic feet of unproven gas reserves, a severe funding gap is preventing this wealth from reaching the power grid.

This week, major cities around the country have witnessed worse-than-usual levels of power cuts. Outages have become more frequent and longer due to maintenance on old critical gas infrastructure.

Now, the federal government said it didn’t release a single naira of capital funding to its Ministry of Power, the kind that builds transmission lines, upgrades substations and connects the roughly 85 million Nigerians estimated to lack reliable electricity access, for the entire 2025 fiscal year.

Data showed that the Ministry of Power was allocated N531.5 billion in capital expenditure for 2025, alongside N10.5 billion in recurrent spending.

The recurrent budget, covering salaries and administrative overhead, was fully disbursed. But none of the capital allocation, the money earmarked for infrastructure, grid upgrades, and sector investment, made it out of the treasury.

“There are three components to the budget: salaries and wages, overhead costs, and capital expenditure,” Adebayo Adelabu, minister of power, told the Senate Committee on Power during his ministry’s 2026 budget defence. “The first two were achieved one hundred per cent, but we recorded zero percent on the capital.”

Adelabu also disclosed that 30 percent of the 2025 capital budget is expected to be released to the ministry before the end of March 2026, while the remaining 70 percent would be implemented for the rest of the year.

“The Federal Government is taking all the necessary steps and measures to ensure that the fiscal error that affected the implementation of the 2025 budget is avoided in the implementation of the 2026 budget. Mr President made this known while presenting the 2026 appropriation to the joint sitting of the National Assembly, so we are sure of a better implementation this year, Adelabu said.

The minister sought to reassure legislators that the absence of capital disbursements had not precipitated a collapse in supply.

He pointed to a relatively stable grid performance in 2025, with only one significant disturbance recorded on September 12, triggered by gas pipeline vandalism in the Niger Delta. By comparison, 2024 saw one full grid collapse and approximately four disturbances, despite what Adelabu described as stronger budget execution that year.

“So it is not true that because we did not get funds, the nation was thrown into darkness in 2025,” he insisted, a claim that will nonetheless ring hollow for the millions of Nigerian households and businesses that remain dependent on expensive diesel generators to supplement an unreliable national grid.

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Nigeria generates somewhere between 4,000 and 5,000 megawatts of electricity on most days, a figure that has remained stubbornly flat for years despite successive government pledges to double, triple, or transform it. South Africa, with roughly a third of Nigeria’s population, generates more than four times as much.

Ghana, a far smaller economy, records higher per-capita electricity consumption. The gap between Nigeria’s energy potential and its energy reality is, by almost any measure, one of the most striking failures of resource management in the developing world.

Nigeria’s electricity problem has become a national embarrassment,” said Jide Pratt, Country Manager of TradeGrid and Chief Operating Officer of Aiona. “Up NEPA is a 50-year-old problem, and at this stage, regardless of who or the size of the problem, it should be a sackable offence.”

Joy Ogaji, the Association of Power Generation Companies (APGC), said generating companies, who are entitled to about 60 percent of the market receivables following their invoiced energy bills, face the greatest risk in the electricity value chain with an outstanding unpaid invoice of now over N6trillion.

“GenCos deserve pity and not castigation, ridicule and victimisation. Trying to smear their image with such baseless and unfounded allegations is not only unfair but misleading to the Nigerian populace: giving the impression that the sector is not regulated, and that electricity market participants can do as they pleased on checked,” she added.

Last Thursday, Johnson Akinnawo, acting managing director of the Nigerian Bulk Electricity Trading Plc, the state-backed off-taker that sits at the centre of the electricity market, told senators that while his agency had been allocated N858bn in the 2025 budget, only N60m was ultimately released.

“At the close of the year, only N60 million was released toward the end of the year. Unfortunately, because of that, our budget performance was affected,” he said.

The disclosure prompted pointed questioning from Senator Sani Musa, who chairs the Senate Finance Committee. “If market performance is good, it should be sustainable for the markets,” he said, pushing back against NBET’s characterisation of collections data.

Distribution companies collect revenues from consumers and remit them to pay power generation companies, but those collections, depressed by metering gaps, energy theft and tariff shortfalls, are chronically insufficient to cover the actual cost of supply.

The federal government, through partial risk guarantees administered by the Ministry of Finance, is supposed to cover the residual gap. In practice, it frequently does not.

“There remains a gap between the cost of generation, transmission, and distribution of electricity,” Akinnawo said. “A chain is only as strong as its weakest link. Due to decades of poor investment, that is why we are where we are today.”

Compounding the challenge is significant foreign exchange exposure. Nigerian power tariffs are partly dollar-indexed, reflecting the import costs embedded in fuel and equipment supply chains.

The naira’s sharp devaluations since 2023, a consequence of the Tinubu administration’s unification of the exchange rate, have dramatically increased the naira cost of servicing those obligations, further widening the gap between what consumers pay and what the system requires to function.