5 October 2017

Nigeria: Govt Approves Payment of N26bn Electricity Debt to Discos

The federal government yesterday approved the payment of a whopping N26 billion to Electricity Distribution Companies (DisCos) as debt owed them for power consumption by Ministries, Departments and Agencies (MDAs).

This was disclosed by Minister of Power, Works and Housing, Babatunde Fasola after the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari at the presidential villa.

This amount is, however, below the over N70 billion claimed by the DisCos as debt government ought to pay them.

The N26 billion will be settled from the about N500 billion the companies are currently owing the federal government.

Fashola explained that the amount approved for payment by Council is what has been verified after the claim by the DisCos.

According to him, the electricity companies may have lumped up debts owned by some state governments and such other organisations not owned by the federal government to have arrived at the N70 billion.

Noting that the claim is not verifiable, the minister said, "We presented a memorandum to FEC to approve the verified sum of monies being debts owed by MDAs to distribution companies for electricity supplied to them since the beginning of this administration.

"Claims of debts by government to DisCos have been a matter of concern, especially in the light of liquidity issues. We had committed that those figures would be verified and the verified sums, government would pay.

"We have concluded the verification and we now asked council to approve the verified sum of N25.994 billion owed by MDAs of the federal government to be paid to the DisCos, out of the claims of N67.41 billion. So, there is a differential of about N41 billion.

Fashola further explained that the differential arose first because some of the claims do not belong to the federal government, adding that some are owed by states and local governments, while some belong to public international organisations and were classified as government debts.

He continued: "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. And 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 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 (NBET), 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 about N500 billion to government".

Also speaking during the briefing, the Minister of Agriculture, Audu Ogbeh disclosed that his ministry will investigate what he described as "poor quality" yams exported to the United States of America.

Reports have suggested that some consignments of yams that left Nigeria some months ago to the US by sea all got rotten before their arrival at the final destination.

The Minister said, "We were mandated to brief you about development in the agric sector. One of the development about the consignment of yams which was exported from here to the United Stated and which, according to the reports we have today, was found to be of poor quality. The ministry will investigate because the ministry is not an exporter. The exporters are private people.

"We will investigate the company that exported it and ask our quarantine department to check and find out why such a consignment left here".


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