Billing Bonanza, Collection Calamity
Electricity distribution companies (Discos) stunned Nigerians with a jaw-dropping 106.68 per cent year-on-year surge in billing—from ₦368.65 billion in Q1 2024 to ₦761.91 billion in Q1 2025—yet they managed to collect just ₦559.3 billion, leaving a yawning ₦202.61 billion shortfall (26.6 per cent) .
This marks a dramatic doubling of revenue lost compared to Q1 2024, when Discos billed ₦368.65 billion but collected only ₦291.62 billion, a 79.1 per cent collection rate and a ₦77.03 billion gap.
Despite marginal improvements over the weaker Q4 2024 performance (73.94 per cent efficiency on ₦658.40 billion billed) the quantum of lost funds has spiralled, underscoring systemic rot in revenue assurance.
Historical Context: Privatisation Promises Unfulfilled
When Discos were privatised in 2013 under the Nigerian Electricity Market Stabilisation Facility, the Central Bank’s escrow mechanism was lauded as a panacea for investment and efficiency shortfalls.
Yet, twelve years on, the promised capital injection has failed to materialise. Only 5.91 million of the 12.33 million customers were metered by Q1 2024, leaving a vast unmetered majority at the mercy of estimated billing rife with manipulation.
Technical, commercial and collection (ATC\&C) losses remain entrenched well above the MyTO target of circa 20 per cent, eroding Discos’ ability to finance network upgrades or even maintain existing infrastructure.
ATC\&C Losses: A Persistent Drain
Aggregate ATC\&C losses have oscillated alarmingly in recent quarters—from 46.39 per cent in Q1 2023 to a modest 38.41 per cent in Q2 2023, before rising to 39.45 per cent in Q3 2023.
Q4 2023 saw losses spike to 42.11 per cent, comprising 21.55 per cent technical and commercial losses and 26.21 per cent collection loss.
In Q3 2024, losses hovered at 39.10 per cent, reflecting a stubborn inability to meet efficiency targets despite sporadic collection campaigns.
At these levels, Discos forfeit nearly four out of every ten naira of value delivered—an unsustainable bleed that threatens the entire electricity value chain.
Disparities Deepen Regional Fault Lines
A detailed breakdown of Q1 2025 exposes glaring regional disparities. Lagos-based Ikeja Electric led billing at ₦129.91 billion yet only recovered ₦101.20 billion (77.9 per cent efficiency), losing ₦28.71 billion.
Eko and Abuja Discos fared marginally better, but still posted shortfalls of ₦22.25 billion (17.9 per cent) and ₦21.63 billion (19.7 per cent) respectively.
At the nadir, Jos Disco collected a paltry ₦17.13 billion from ₦36.31 billion billed—a catastrophic 52.8 per cent loss—while Kano, Kaduna and Yola Discos each forfeited between 37.1 per cent and 60 per cent of their billed revenue.
The northern axis remains a revenue black hole, exacerbating investor scepticism and fuelling grid instability.
Ministerial Rebuke and Regulatory Muscle-Flexing
In a recent media briefing, Minister of Power Adebayo Adelabu lambasted the “chronic underperformance” of Discos, accusing them of skimping on metering, network upgrades and revenue-assurance tools.
“This inefficiency is one of the biggest obstacles to cost-reflective tariffs and sector investment,” he thundered, warning that licences of persistently failing Discos could be revoked without measurable improvement.
Underlining the seriousness, NERC has pledged to strengthen performance agreements and accelerate enforcement, but sceptics argue that fines and threats alone cannot compensate for decades of capital starvation.
Consumer Advocates Cry Foul
Mr Uket Obonga, National Secretary of the Nigeria Electricity Consumer Advocacy Network, tore into Discos for “gross underperformance” and “blatant regulatory flouting”.
He spotlighted rampant load rejection, unauthorised meter tampering and arbitrary billing for unmetered customers, despite repeated NERC sanctions.
“How much of these inflated bills reflect actual consumption? Are Discos adhering to energy caps, or are they simply fleecing the unmetered?” he demanded.
Obonga attributes the sector’s dysfunction to a failure of private investors to reinvest acquisition capital and a government that has overseen little transformation despite holding 40 per cent equity.
Downstream Domino Effect
Revenue shortfalls in distribution reverberate upstream: generation companies struggle to get paid, while the Transmission Company of Nigeria (TCN) faces its own liquidity crunch.
Without prompt remittances, scheduled maintenance is deferred, plant availability plummets, and blackouts become the new normal.
This vicious cycle drives small businesses—Nigeria’s economic backbone—to clutch diesel generators, further inflating operating costs and undercutting national competitiveness.
Call to Action: Structural Reform, Not Band-Aid Solutions
The NERC report insists that Discos must “close the metering gap, improve network reliability, and enhance billing transparency” if collection rates are to rebound.
But without radical structural reforms—ranging from robust escrow enforcement, digital billing platforms and community-based revenue assurance agents, to clear-cut penalties for default—the sector will remain adrift.
Nigeria’s power crisis isn’t just an inconvenience; it is an existential threat to economic growth, social stability and foreign investment.
Atlantic Post writers Taiwo Adebowale & Peter Jene contributed to this report.
