NERC Report: DisCos lose N60bn revenue as crisis deepens

Emmanuel Kwada

Nigeria’s electricity Distribution Companies (DisCos) suffered revenue shortfall of N60bn in 2024, plunging the sector deeper into a liquidity crisis that threatens the stability of the nation’s power supply chain.

NERC Headquarters Abuja.

Recent data from the Nigerian Electricity Regulatory Commission (NERC) accessed by The Insight on Friday painted a grim picture: uncollected revenue ballooned by N60.25bn in December alone, amplifying financial strains already buckling under years of underperformance and systemic inefficiencies.

This sharp decline, detailed in NERC’s latest quarterly report, underscores a troubling trend for the 11 DisCos tasked with powering Nigeria’s 200 million-plus population.

Uncollected revenue ballooned by N60.25bn in December alone

In December 2024, these utility firms billed customers N238.21bn for electricity consumed, yet managed to retrieve only N177.96bn—a collection efficiency of just 74.71 per cent .

This marks a decrease from earlier quarters, with the third quarter of 2024 (Q3) recording a slightly better 74.55 per cent efficiency, where DisCos collected N466.69bn out of N626.02bn billed.

The year-end collapse in collections signals a worsening inability to recover funds, exacerbating an already precarious financial state.

The N60bn shortfall in December caps a challenging 2024 for DisCos, whose revenue performance has faltered despite earlier gains. In Q2 2024, the companies raked in N431.16 bn out of N543.64bn billed, achieving a 79.31 per cent collection rate—a high point driven by tariff hikes for Band A customers.

Only 5.91 million of Nigeria’s 12.33 million electricity customers metered by Q1 2024

Yet, by Q3, efficiency dipped by 4.76 percentage points from Q2’s 79.31 per cent, with losses mounting as unpaid bills piled up.

The year-end nosedive to 74.71 per cent in December reflects not just seasonal pressures but a deeper structural malaise.

Aggregate Technical, Commercial, and Collection (ATC&C) losses—a key metric of DisCo efficiency—further highlight the crisis.

In Q3 2024, the weighted average ATC&C loss across all DisCos reached 39.10 per cent, comprising technical and commercial losses (18.32%) and collection losses (25.45%).

This represents a 4.40 percentage point increase from Q2’s 34.70 per cent, with no DisCo meeting its Multi-Year Tariff Order (MYTO) target. Kaduna DisCo posted the worst underperformance, logging a staggering 70.84 per cent ATC&C loss against a target of 25.00 per cent, a gap that epitomizes the sector’s woes.

This level of revenue loss is unsustainable

NERC attributed this revenue loss to customer unwillingness to pay, subpar service delivery, and rampant unmetered billing.

“Significant under-recovery of invoices is driven by a lack of willingness to pay when due, unsatisfactory DisCo services, and inadequate metering,” the commission noted.

With only 5.91 million of Nigeria’s 12.33 million electricity customers metered by Q1 2024—per National Bureau of Statistics (NBS) data—the reliance on estimated billing continues to fuel disputes and payment apathy, swelling collection losses.

The liquidity crunch ripples upstream, strangling the entire electricity value chain. DisCos’ remittances to the Nigerian Bulk Electricity Trading Company (NBET) and the Market Operator (MO) have plummeted, with Q3 2024 seeing only N158.43bn paid against a N208.70bn invoice—a shortfall of N50.27bn.

The sector’s financial viability—and Nigeria’s electrification goals—hang in the balance

This chronic underpayment has left Generation Companies (GenCos) cash-starved, hindering their ability to secure gas supplies and maintain output, while the Transmission Company of Nigeria (TCN) struggles to wheel power effectively.

In Q3, Ikeja Electric and Eko DisCo led with collection efficiencies of 94.67 per cent and 88.03 per cent, respectively, buoyed by urban density and better infrastructure in Lagos.

Conversely, Jos, Yola, and Kaduna DisCos languished at the bottom, with August 2024 efficiencies of 50.69 per cent, 52.06 per cent, and 57.16 per cent, respectively, per NERC’s monthly factsheet. These regional laggards, often serving sprawling rural areas, epitomize the metering and service delivery gaps that deepen the crisis.

The Federal Government’s response has been a mix of intervention and restructuring. In May 2024, it began disbursing N205bn to settle a N1.3tn trillion debt to gas suppliers, aiming to boost generation.

Aisha Mohammed a Lagos-based analyst at the Centre for Development Studies warned that “this level of revenue loss is unsustainable.”

Without drastic improvements in collection efficiency, she argued, the sector’s financial viability—and Nigeria’s electrification goals—hang in the balance.

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