By BrandiQ Analyst
Electricity trade within West Africa is often framed as a model of regional cooperation – an interconnected grid designed to balance supply and demand across borders. Yet the latest figures from Nigeria’s power market suggest a more complicated reality, where cross-border energy flows are not always matched by timely financial settlement.
According to the fourth quarter 2025 report of the Nigerian Electricity Regulatory Commission, three neighbouring countries – Benin, Togo and Niger – collectively failed to remit $9.55m for electricity supplied by Nigeria during the period. The shortfall highlights persistent weaknesses in the commercial framework underpinning regional power trade.
The figures are stark. Of the $20.44m invoiced to international bilateral customers across the three countries, only $10.89m was paid, representing a remittance performance of just 53.28 per cent. In practical terms, for every $100 worth of electricity supplied, barely $53 was recovered – leaving nearly half of the value unpaid.
Such gaps are not merely accounting discrepancies. They point to deeper structural tensions within the West African electricity market, where the physical integration of grids has outpaced the financial discipline required to sustain them.
The debts are owed by national utilities in each country. Société Béninoise d’Energie Electrique in Benin received power through multiple Nigerian generation companies, including Paras and Transcorp’s Ughelli and Afam 3 plants. In Togo, Compagnie Energie Electrique du Togo was supplied via Paras and Odukpani, while Société Nigerienne d’Electricite in Niger drew electricity from Mainstream Energy.
Performance across these bilateral contracts varied widely, revealing an uneven pattern of compliance. Some arrangements showed moderate discipline. Paras-SBEE in Benin, for instance, paid 68.16 per cent of its $2.45m invoice, while Paras-CEET in Togo remitted 64.97 per cent of $2.18m billed.
Others fared significantly worse. Transcorp’s Ughelli plant recorded one of the weakest outcomes, with just 12.30 per cent of a $3.74m invoice paid by SBEE. At the extreme end, the Odukpani-CEET contract in Togo saw no payment at all, with a full $2.18m outstanding.
There were, however, pockets of stronger performance. Transcorp’s Afam 3 plant achieved an 82.31 per cent remittance rate from SBEE, while Mainstream Energy’s supply to NIGELEC in Niger recorded a 68.63 per cent payment rate on a $5.96m invoice – the largest single billing in the period.
These variations underscore a central challenge in regional electricity markets: contractual agreements may be standardised, but payment behaviour is not. Differences in fiscal capacity, currency stability and domestic energy pricing policies often shape how, and whether, obligations are met.
There are also signs of partial recovery. The report notes that Société Béninoise d’Energie Electrique made additional payments totalling $3.54m to settle outstanding invoices from previous quarters, covering both Ughelli and Afam 3 supplies. A domestic customer, APLE, similarly cleared N141m in arrears.
Even so, the broader picture remains one of imbalance. While Nigeria continues to export electricity to its neighbours, the financial returns from these transactions are inconsistent, raising questions about sustainability.
The contrast with domestic performance is instructive. Within Nigeria, bilateral customers demonstrated significantly stronger payment discipline, remitting N3.5bn out of N4.17bn invoiced – an 84.23 per cent performance rate. In effect, local customers paid 84 kobo for every naira billed, compared with just over half of invoiced amounts recovered from international buyers.
This divergence highlights the risks associated with cross-border energy trade in regions where economic conditions vary widely. While interconnected grids offer efficiency gains, they also expose suppliers to external credit risk – particularly when counterparties operate in weaker fiscal environments.
Even within the domestic market, challenges persist. The Ajaokuta Steel Company, classified as a special customer, was invoiced N1.26bn during the quarter but made no payment. Such cases illustrate that payment discipline is not solely a cross-border issue, but part of a broader liquidity challenge within the electricity value chain.
At a systemic level, these dynamics reflect the enduring fragility of Nigeria’s power sector. Generation companies supply electricity, but revenue collection remains uneven, constrained by tariff structures, distribution inefficiencies and institutional bottlenecks. When these domestic weaknesses intersect with cross-border trade, the financial strain is amplified.
For policymakers, the implications are significant. Regional electricity trade is often promoted as a pathway to optimise resources, reduce costs and enhance energy security. However, without robust enforcement mechanisms and stronger financial guarantees, such arrangements risk becoming asymmetric – where power flows outward more reliably than payments flow inward.
The data, based on reconciled market settlements submitted as of April 2, 2026, therefore tells a broader story. It is not simply about unpaid invoices, but about the evolving economics of regional integration. As Nigeria positions itself as a power hub within West Africa, the viability of that role will depend not only on generation capacity, but also on the credibility of its commercial framework.
In the absence of consistent payment discipline, the incentives for continued supply may weaken. Generation companies, already operating within tight financial margins, may become more cautious in extending cross-border contracts without stronger assurances.
For neighbouring countries, the challenge is equally pressing. Reliable electricity imports can support industrial activity and economic growth, but only if they are underpinned by sustainable financing arrangements. Persistent arrears risk undermining both supply stability and regional cooperation.
The tension, then, is clear. West Africa’s energy future depends on deeper integration, yet that integration requires a level of financial coordination that remains elusive. Bridging this gap will demand more than technical connectivity. It will require reforms that align incentives, strengthen accountability and ensure that the economics of power trade are as robust as its engineering.
Until then, the region’s electricity market will remain caught between ambition and reality -connected by wires, but divided by payments.
