The Nigeria Bulk Electricity Trading Company (NBET) finds itself at the center of a financial controversy, alleging that its efforts to recover approximately $69.38 million in debts from two foreign firms in Benin Republic were thwarted by a petition from the Transmission Company of Nigeria (TCN). This dispute unveils a complex web of regulatory challenges and bureaucratic hurdles within Nigeria’s energy sector, shedding light on the broader issues of financial management and international cooperation in West African power distribution.
NBET, which plays a pivotal role in managing power sales on behalf of the Nigerian government and operates under the supervision of the Federal Ministry of Finance, has been embroiled in this predicament since June 2017. At that time, NBET and TCN, through a joint communication, advised their counterparts in Benin Republic to continue payments to the account of TCN’s Market Operator until a new contractual framework could be established directly with NBET. However, efforts to negotiate this new framework were met with resistance, not only from the international customers but also from TCN itself, which claimed that NBET should not be involved in the ECOWAS regional electricity market contracts.
The contention escalated when TCN asserted its exclusive right to recover all outstanding debts and reported that it was already in discussions with the debtor companies for a payment plan. This stance effectively sidelined NBET, complicating the debt recovery process and raising questions about the roles and responsibilities of various entities within Nigeria’s energy sector.
This financial imbroglio was further highlighted in an audit query by the Office of the Auditor General for the Federation, which scrutinized the NBET’s financial activities for the year ended 31st December 2020. The audit, detailed in a report signed by Auditor General Shaakaa Chira, underscored non-compliance and internal control weaknesses within federal agencies, with NBET’s uncollected debt of approximately $69.40 million—equivalent to about N25.19 billion at the time—drawing particular concern.
The query also brought to light that, as of January 2019, NBET had not taken sufficient measures to recover this substantial amount, despite provisions in the contract agreements that allowed for the imposition of interest on the overdue amounts. This lapse in revenue collection efforts not only affects NBET’s financial health but also reflects broader challenges in the enforcement of contractual obligations and revenue collection within the public sector.
Additionally, the audit unearthed issues beyond the uncollected foreign debts, including a failure to recover loans amounting to N188.36 million from former employees, including a managing director. This situation further complicates the financial sector for NBET, highlighting issues of accountability and financial governance within the entity.
In response to the audit findings, NBET management cited ongoing efforts to reconcile and recover the payments credited to TCN, while also addressing the delayed submission of audited financial statements for the years 2017 to 2019. The engagement of an accounting firm to audit the outstanding financial statements represents a step towards rectifying the identified lapses and improving financial management practices within NBET.
