House Committee Summons 11 Electricity Discos Over N2.6 Trillion Debt to Federation Account
In a decisive move to address a monumental financial shortfall, the House of Representatives Public Accounts Committee has issued a formal summons to the chief executives of Nigeria’s 11 electricity Distribution Companies (Discos). The summons, issued on Wednesday, demands their appearance to provide a detailed explanation for a staggering N2.6 trillion debt owed to the federation account, a liability that threatens the stability of the nation’s entire power sector.
Auditor General’s Report Triggers Parliamentary Scrutiny
The investigative hearing, chaired by Representative Bamidele Salam, was convened to scrutinize the 2021 report from the Office of the Auditor-General of the Federation. The document served as a stark indictment of financial mismanagement and systemic failures within the Nigerian Electricity Supply Industry (NESI). The session featured a pivotal appearance by Mr. Johnson Akinnawo, the Managing Director of the Nigerian Bulk Electricity Trading Company (NBET) PLC, who presented the committee with detailed documentation outlining the crippling scale of the liabilities.
According to the NBET submission, as of September 30, 2020, the cumulative debt had ballooned to N2.6 trillion. This figure represents unpaid remittances for electricity already purchased and supplied to the distribution companies, funds that are critically needed to pay power generation companies and maintain the national grid.
A Breakdown of the Massive N2.6 Trillion Liability
The committee reviewed a detailed breakdown of the debt, painting a clear picture of the financial delinquency pervasive across the sector. The individual debts of the 11 Discos are as follows:
The Top Debtors
Ibadan Electricity Distribution Company leads the list with an outstanding debt of N325.7 billion, closely followed by Abuja Electricity Distribution Company (AEDC) at N330.4 billion and Ikeja Electricity Distribution Company at N310 billion.
Significant Contributors
The debt portfolio includes substantial amounts from other key players: Kaduna Electricity Distribution Company (N277.7 billion), Enugu Electricity Distribution Company (N258.3 billion), Benin Electricity Distribution Company (N233.2 billion), and Port Harcourt Electricity Distribution Company (N239.7 billion).
Other Notable Debts
Rounding out the list are Eko Electricity Distribution Company (N231 billion), Kano Electricity Distribution Company (N211.7 billion), Jos Electricity Distribution Company (N161.7 billion), and Yola Electricity Distribution Company (N107.4 billion).
Beyond the Debt: A Cascade of Financial Irregularities
The Auditor-General’s 2021 report, which served as the catalyst for this high-stakes hearing, flagged a troubling cascade of financial irregularities that extend far beyond the Discos’ debt. These findings suggest deep-rooted structural problems that have allowed significant revenue leakage within the power value chain.
The report highlighted several critical issues, including a N30 billion uncollected debt by NBET from market operators and a N549 million shortfall in NBET’s statutory 1% income from institutional charges. Perhaps most alarming was the revelation that NBET paid N100 billion to Generation Companies (GENCOs) for electricity that was never actually delivered to the national grid, raising serious questions about accountability and verification processes.
On the international front, the report noted that two foreign firms owe Nigeria N26 billion for power exported to neighboring countries Togo, Benin, and Niger. Furthermore, the Discos were found to have under-remitted a colossal N166 billion, falling severely short of the minimum threshold set by the Nigerian Electricity Regulatory Commission (NERC). An additional N2.7 billion in unpaid invoices by the 11 Discos was also identified.
Lawmakers Demand Accountability and a Repayment Roadmap
Confronted with the magnitude of these financial discrepancies, the committee moved swiftly. A motion was tabled by Hon. Yahya Kusada and formally seconded by Hon. Billy Osawaru, leading to the unanimous resolution to summon the Disco managements.
“With the magnitude of liabilities before us, it is imperative that these companies appear before the Committee to clarify their positions and outline concrete, verifiable plans for repayment,” Hon. Kusada stated during the session. The sentiment echoed throughout the committee, reflecting a growing impatience with the perennial issue of non-remittance that has long plagued Nigeria’s efforts to achieve a stable power supply.
The Committee has also resolved to extend invitations to other key market participants and operators to provide testimony and address the broader concerns raised in the Auditor General’s report. A formal date for the appearances of the Disco chiefs is expected to be communicated imminently.
The Broader Implications for Nigeria’s Power Sector
This summons represents more than just a routine parliamentary inquiry; it is a critical juncture for Nigeria’s power sector. The N2.6 trillion debt is not merely a number on a balance sheet. It translates to crippled generation companies unable to pay for gas, dilapidated infrastructure that cannot be maintained or upgraded, and ultimately, continued poor electricity supply for homes and businesses. This financial black hole stifles economic growth, discourages investment, and perpetuates a cycle of inefficiency.
The upcoming hearing will be closely watched by investors, stakeholders, and the Nigerian public. It will test the resolve of lawmakers to enforce fiscal responsibility and could set a precedent for greater accountability across all facets of the nation’s infrastructure management. The fundamental question remains: Can the Discos justify this staggering debt, and what viable path exists for its resolution to finally set the power sector on a course toward sustainability and reliability?
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