N26bn debt: FG approves payment to electricity distribution companies

The Federal Government on Wednesday approved payment of N25.994bn owed by Ministries, Departments and Agencies to electricity companies.

The Minister of Power, Works and Housing, Mr. Babatunde Fashola disclosed this to State House Correspondents after the Federal Executive Council meeting at the Presidential Villa, Abuja.

Background:

Electricity Distribution Companies had claimed that they are unable to function properly because they were being owed huge amount  of money by the government.

What the Minister said:

  • The government had earlier agreed that it would only pay verified sums after proper verification is done.
  • The debt has been a matter of concern to the incumbent administration.

He said, “We have concluded the verification and we now ask council to approve the verified sum of N25.994bn owed by MDAs of the Federal Government to be paid to the DISCOS out of the claims of N67.41bn.

“So, there is a differential of about N41bn. That differential arises first because some of the claims do not belong to the Federal Government. Some are owed by states and local governments. Also, some belong to public international organisations and were classified as government debts.

“So, there is more verification going on and undertaking at states and local governments which we have discovered at the National Council on Power about a week ago. This is important so that government can demonstrate its support for the private sector by paying its own debts so that the sector can do what they do well.

“Government has also approved that this amount that has been quantified be set off against the amount owed by the DISCOS to Nigerian Bulk Electricity Trader, a 100% Federal Government-owned subsidiary company. They also owe government for their unremitted collections for energy they have taken and have not remitted. They are owing government about N500bn.”

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