Nigeria’s Power Crisis Begins With One Question: Who Pays?

Infrastructure projects do not fail only because funding is scarce. They also fail when nobody can clearly identify who pays, where the first payment lands and how the cash will keep flowing over time. Nigeria’s electricity sector shows the cost of this gap. Distribution losses remain high, tariffs have often fallen below the cost of supply and government has repeatedly covered large shortfalls. The result is unpaid generators and gas suppliers, grid disruptions and millions of households and businesses relying on petrol generators. A viable power project needs more than a financial model. It needs a cost-reflective price, a legally obligated payer, a transparent collection system and an arrangement that can survive political change. Where tariffs cannot cover costs, subsidies should be clearly budgeted rather than hidden as debts within the system. Better metering, escrow arrangements, credible payment obligations and targeted support for vulnerable consumers can help make infrastructure finance more sustainable.

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