LAGOS, June 10 (AGCNewsNet) – Nigeria’s electricity distribution companies (Discos) recorded a revenue shortfall of ₦202.61 billion in the first quarter of 2025, despite a 106.7% year-on-year increase in customer billing, according to the latest data from the Nigerian Electricity Regulatory Commission (NERC), analysed by Punch newspaper.

The 12 Discos billed customers a total of ₦761.91 billion between January and March 2025, up from ₦368.65 billion in the same period of 2024. However, only ₦559.3 billion was recovered during the quarter, reflecting a collection efficiency of 73.4% and leaving a gap of 26.6%.

While this marks an improvement in billing volume and nominal collections compared to the first quarter of 2024—when only ₦291.62 billion was collected—industry observers noted a worsening in the absolute size of revenue lost, which more than doubled year-on-year.

“The performance underscores continued weaknesses in the collection systems of Discos, particularly in northern Nigeria where collection rates remain lowest,” said an unnamed energy analyst quoted in the Punch report.

Quarter-on-quarter data also showed a mild improvement. In Q4 2024, Discos collected ₦509.84 billion from ₦658.40 billion billed. Yet, several Discos still recorded substantial gaps in revenue assurance, raising renewed concerns about the financial sustainability of the electricity value chain.

Nigeria’s Minister of Power, Adebayo Adelabu, expressed disappointment over what he termed “chronic underperformance” by the Discos.

“The Discos are not meeting expectations. There is a serious lack of investment in infrastructure and revenue assurance mechanisms,” Adelabu said during a recent media briefing. “This inefficiency is one of the biggest obstacles to ensuring cost-reflective tariffs and attracting investment into the sector.”

Adelabu added that the government is reviewing the Discos’ performance agreements and warned that licenses of persistently non-performing operators could be revoked.

Energy experts have also raised alarms that the shortfalls threaten not only the viability of the Discos but the stability of the entire electricity value chain—including transmission and generation companies that depend on timely remittances to remain solvent.

The NERC report further highlighted significant disparities in collection efficiency across different Discos, with some showing moderate improvement while others continued to lag.

"The financial health of the power sector is closely tied to the collection capabilities of these utilities. Without aggressive investment in metering, network upgrades, and better revenue systems, the entire ecosystem remains at risk," said a senior consultant with a Lagos-based energy advisory firm.

Despite tariff hikes and ongoing reforms, the data suggests that Nigeria’s power sector continues to struggle with foundational issues that have long undermined its effectiveness and credibility.

Stay connected with AGC NewsNet for the latest news from Africa.