Nigeria is facing a widening shortfall in electricity export revenue as neighbouring countries, Togo, Benin, and Niger, failed to remit over $40 million in power supply bills between 2022 and 2024, according to data from the Nigerian Electricity Regulatory Commission (NERC).
This has put more pressure on the nation’s cash-strapped power sector, which is failure to provide adequate electricity for over 200 million citizens.
NERC’s 2024 annual report revealed that the Nigerian Market Operator (MO) issued a $56.07 million invoice to three international bilateral customers: Société Béninoise d’Énergie Électrique (Benin), Compagnie Énergie Électrique du Togo (Togo), and Société Nigérienne d’Électricité (Niger).
However, only $42.06 million was remitted, representing a payment performance of 75.01 percent.
This marked a significant drop from 2023, when the same countries were invoiced $53.55 million and paid $50.36 million, achieving a remittance rate of 94.04 percent. In 2022, they were billed $51.02 million but remitted just $28.27 million.
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The cumulative shortfall over the three-year period amounts to more than $40 million, raising concerns over the sustainability of Nigeria’s electricity exports under the West African Power Pool (WAPP) framework.
For years, Nigeria has supplied power to its regional counterparts under the WAPP and bilateral agreements, fostering economic cooperation. But the failure of some recipient countries to meet payment obligations is weighing on the country’s already fragile electricity market.
Experts say the growing debts threaten the financial health of local power generators and gas suppliers, which rely on payments to cover operating costs, invest in infrastructure, and settle their own obligations.
The declining remittance rate and fluctuating invoice values come at a time when Nigeria is struggling to meet internal demand, with generation hovering around 4,000MW for over 200 million people.
In an earlier conversation with BusinessDay, Chinenye Ajayi, team lead of the Power and Infrastructure Practice at Olaniwun Ajayi LP, explained that many generation companies export electricity to neighbouring countries due to limitations in Nigeria’s transmission infrastructure, which can only accommodate an average of 4,000 to 5,000 megawatts.
While this may appear commercially sensible, she noted that the growing backlog of unpaid debts is undermining the strategy.
In addition to foreign customers, NESI also served 17 active domestic bilateral customers in 2024, who were issued a total invoice of N7.93 billion and made N5.97 billion in payments, a remittance performance of 75.30 percent.
This marks a decline from 2023, when 19 domestic bilateral customers were invoiced N10.32 billion and paid N8.77 billion, corresponding to a stronger remittance rate of 84.94 percent.
With remittance performance weakening on both international and domestic fronts, and regulatory action intensifying, questions remain about how long Nigeria can sustain regional electricity obligations while barely powering its economy.
Meanwhile, recent figures from the International Trade Centre (ITC) show that Nigeria’s electricity exports have reached a total value of $112 million.
As of 18 January 2025, Nigeria’s electricity exports to Benin stood at $66 million, with a potential market value of $82 million, indicating an unrealised export potential of $16 million.
Likewise, exports to Niger were valued at $46 million, with an estimated potential of $51 million, leaving an unrealised value of $4.1 million.
According to the ITC, Nigeria’s top export products to Benin included electrical energy, urea, and iron or steel bars and rods. The organisation also pointed out that the largest gap between actual and potential exports lies in electrical energy, with an unrealised export value of $4.1 million.
The ITC further stated that Nigeria’s exports to Niger comprise electrical energy, Portland cement, and various food preparations such as soups and broths.
While the data reflects a growing trend in electricity exports, it has also raised concerns about the domestic energy situation.
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Princewill Okorie, executive director of the Electricity Consumer Protection Advocacy Centre, questioned the government’s priorities: “Are the electricity companies in those countries we export power to treating their consumers better than Nigerian consumers?”
He said, “We cannot be celebrating electricity exports while citizens here are grappling with blackouts and exploitation, contrary to our consumer protection laws. A responsible parent ensures their household is cared for before attending to others.”
He went on to criticise the decision to export electricity, questioning whether the revenue generated was truly being used to improve Nigeria’s power sector.
“What matters more, the welfare of Nigerians or the money earned from exporting electricity? If such revenue is being realised, why isn’t it being reinvested into the power sector, especially when we’re constantly told there’s a lack of liquidity?” Okorie queried.
“What sense does it make for our local industries and economy to be crippled by poor electricity supply, while we boost the economies of other countries through exports?” he added.
