Nigerian DisCos Face 33% Revenue Shortfall in 2024 Amid Metering Issues and Poor Service

In 2024, Nigeria’s electricity distribution companies (DisCos) experienced a significant 33% revenue shortfall, collecting only N1.699 trillion of the N2.196 trillion billed to customers. This gap highlights ongoing challenges in the country’s power sector. According to the Nigerian Electricity Regulatory Commission (NERC), revenue collection was consistently below target across all four quarters of the year, with the first quarter showing a particularly concerning shortfall.

The regulatory body pointed to several factors contributing to the poor revenue performance. Among the primary issues were the inadequate metering of customers, which hinders accurate billing, and customers’ reluctance to pay their electricity bills on time. Additionally, the DisCos’ services were often unsatisfactory, which further discouraged timely payments. The report emphasized that these issues persistently undermine the financial stability of the sector.

Another significant issue highlighted was the outstanding debt from international bilateral customers, including those in Benin Republic, Niger Republic, and Togo. These customers accumulated a $34.52 million debt for services rendered in 2024, with no payments made against their invoices in the first quarter of the year. Despite some payments in the following quarters, the debts remain substantial, further complicating Nigeria’s efforts to stabilize the power sector.

The lack of payment from major domestic customers, such as Ajaokuta Steel Co. Ltd, also exacerbated the problem. While some domestic customers made partial payments, the overall remittance performance remained low, particularly in the second and third quarters. These challenges underscore the critical need for reform in Nigeria’s electricity distribution system to ensure better service delivery and more efficient revenue collection.

source: business day