Nigeria has approved the payment of 185 billion naira, equivalent to $128 million, to settle long-outstanding debts owed to gas producers that supply fuel to electricity generators, in a move aimed at restoring confidence in the energy market and improving electricity supply nationwide.
As per Reuters, the decision was approved by the National Economic Council, chaired by the vice president, following a directive from President Bola Tinubu to clear the arrears that have discouraged investment, strained cash flows across the sector, and limited gas availability for power generation, according to the minister of state for petroleum.
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Ekperikpe Ekpo said the settlement will be carried out through a “royalty-offset arrangement” and described the move as a “decisive step” toward revitalising Nigeria’s gas industry and stabilising electricity production.
He added that the initiative aligns with the government’s broader plan to nearly double the country’s gas output to 12 billion cubic feet per day by 2030.
Nigeria, Africa’s most populous nation, has struggled with chronic electricity shortages for decades, a challenge that continues to disrupt business activity and constrain overall economic growth.
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Image Credit: CNBC Africa
