Nigeria’s electricity distribution companies generated approximately N3.95 trillion in revenue from 2019 to the first quarter of 2024, according to the National Bureau of Statistics.
The data shows a steady increase in revenue over these years; N482.6 billion in 2019, N526.8 billion in 2020, N761.2 billion in 2021, N828.1 billion in 2022, N1.07 trillion in 2023, and N291.6 billion in the first quarter of 2024.
This revenue growth is attributed to several factors, including ongoing tariff adjustments that align revenue with the cost of providing electricity, and the National Mass Metering Programme, which has reduced estimated billing and improved revenue accuracy.
This programme has also mitigated Aggregate Technical, Commercial, and Collection losses.
Enhanced regulatory oversight and modern technology in billing and collection have further streamlined processes and minimized revenue leakages.
Despite these improvements, the Discos face significant challenges such as high unpaid bills, electricity theft, infrastructure deficits, and energy losses, which have limited their ability to fully leverage Nigeria’s electricity market potential.
President of the Nigeria Consumer Protection Network, Kunle Olubiyo, criticized the Discos for their inefficiency and lack of compliance with pre-privatisation commitments.
He argued, “We cannot score the Discos more than five per cent. In terms of complaints resolution, they lack the software to track issues and have failed woefully in conflict resolution.” Olubiyo also pointed out problems with the National Mass Metering Programme, accusing some meter vendors and Discos of conspiracy and failing to implement proper metering protocols.
Olubiyo expressed concerns about the effectiveness of government interventions and highlighted issues like governance and liquidity problems that lead to the appointment of interim management teams.
He welcomed the recent empowerment of states to regulate electricity under the Electricity Act and urged the Federal Government to invest in Discos and focus on resource-driven energy solutions.
Reflecting on the sector’s stagnation, Olubiyo noted, “In 2013, the peak generation on the grid was 5,800 megawatts. As we speak, from 2013 to now, we haven’t even been able to hit 6,000 megawatts of electricity evacuation on the grid,” describing the situation as “a decline or backward growth, progressing in error.”
On a positive note, Olubiyo praised the licensing of companies like MTN and Honeywell for bulk electricity trading and independent power plants as steps towards stabilizing power supply, especially for industrial areas.
Meanwhile, the Transmission Company of Nigeria reported a funding shortfall of N637.37 billion out of the required N1.79 trillion, affecting the completion of 129 critical projects.
TCN’s Managing Director, Abdulaziz Sule, urged the National Assembly to address these funding issues to ensure project completion and efficient service delivery.
Additionally, Minister of Power Adebayo Adelabu revealed that generating one kilowatt-hour of electricity costs N120, a figure that doesn’t include additional charges.
He highlighted that consumers in Band A pay N209, while Band B pays N65, with the Federal Government subsidizing the difference. Adelabu also discussed the potential introduction of a differential tariff system to encourage electricity demand and improve access.
Adelabu noted that many bulk electricity consumers have shifted to captive power plants due to a lack of trust in the national grid.
He said, “The majority of bulk electricity users, such as industries, are off the grid due to a lack of trust and confidence in the past.” He emphasized the need to restore trust and stability in the grid to encourage these consumers to reconnect for a cheaper power source.
