Electricity consumers across the county owed the 11 electricity Distribution Companies (DisCos) N497.4bn debt in 2024, analysis of a quarter report produced by the Nigerian Electricity Regulatory Commission (NERC) has shown.
The analysis showed that the DisCos issued out bills culminating into N2.19tr during the year with customers paying N1.69tr, meaning 23 per cent of the bills were not paid by the customers.
A breakdown indicated that consumers were given N368.65bn bills in the first quarter of the year, which they paid N291.62bn, but did not pay N77.03bn. In the second quarter, the bill increased to N543.64bn owing to the increase in Band A tariff from which N431.16bn was paid but N112.48bn was not paid.
The bill further increased to N626.02bn in the third quarter but N466.69bn was paid and N159.33bn was owed.
In the fourth quarter, N658.4bn was issued out of which N509.84bn was paid while N148.56 was not.
DisCos with highest consumers debt
Abuja DisCo was the most owed company with N71.44bn left unpaid from the N349.96bn it gave out. This is followed by Ibadan DisCo with N68.27bn debt from the N261.4bn bills and Kano DisCo with N61.15bn from the N136.52bn it gave its customers. Others include Jos DisCo owed N45.67 bn from N105.32bn bill, Eko DisCo with N44.83bn from N352.4bn, Ikeja DisCo with N40.51bn from N371.22bn; Port Harcourt DisCo with N39.45 from N155.03bn.
Enugu DisCo was owed N36.04bn from the N163.23bn bills it issued, Kaduna DisCo was owed N35.35bn from the N81.86bn electricity bills it gave out, Benin DisCo was owed N34.49bn from the N177.69bn bills it gave out and Yola DisCo was owed N20.25 from the N42.11bn bill.
Sector’s liquidity crisis worsens
Nigeria’s Electricity Supply Industry (NESI) has been battling liquidity issues since its privatisation in 2013. The sector, which was already in a rot when it was in the hands of the government, could still not get a lifeline with private investors who have been accused of milking the companies that were sold.
While there has been steady improvement in the generation sector, the transmission, which is still in the hands of the government and the distribution sectors, have seen little investment that holds up expansion of the national grid and distribution areas. With the country’s population increasing yearly, the limited investment made has been strained by increasing demands which is affecting electricity access to those already in the grid.
The poor supply experienced by consumers and lack of transparency has forced some electricity consumers not to pay their bills or underpay.
Like citizens like government
The N497.4bn consumers owed to DisCos is separate from the N2tr the federal government owed the sector as electricity subsidies.
It would be recalled that the Minister of Power, Adebayo Adelabu had in February said it is owing electricity Generation Companies (GenCos) N1.9 trillion as electricity subsidy for 2024 while DisCos are owed N450 billion for 2024 electricity subsidy.
But a statement by the Chairman BOT, Power Generation Companies, Col Sani Bello (rtd), threatened to shut down its operations over the debt that has increased to N4trn.
The statement said GenCos have continued to bear the brunt of the liquidity crisis in the NESI but the increasing debts owed by the government without a clear financing plan, lack of firm contracts and a market without securitisation are hampering future planning.
“Against the backdrop of the many challenges facing the power sector in Nigeria, the crises from cash liquidity are on the top burner and have reduced GenCos’ ability to continue to perform their obligations, thereby threatening to completely undermine the electricity value chain.
“The GenCos’ expectations of being settled through external support, such as the World Bank PSRO, have also been dampened due to other market participants’ inability to meet their respective Distribution Linked Indicators (DLIs) as enshrined in the Power Sector Recovery Programme (PSRP).”
It added that access to forex is another problem given that major operation and maintenance needs in the generation subsector are dollarised. It added that bills it collected in 2024 have dropped below 30%, and 2025 is not any better, thereby severely affecting GenCos’ ability to meet financial obligations, while high corporate income tax, concession fees, royalty charges, and new FRC compliance obligations are further straining their revenue.
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