The Nigerian electricity distribution sector faced significant financial challenges in May 2025, as revealed by the Nigerian Electricity Regulatory Commission’s commercial performance report. Despite an increase in both energy supply and the total amount billed to consumers, the DisCos experienced a substantial decline in revenue collection, widening the gap between billed amounts and actual payments received. This shortfall underscores the persistent issues plaguing the sector, particularly regarding revenue assurance and the financial viability of the distribution companies.
The report indicates that while the DisCos billed N261.82 billion to consumers in May 2025, they only managed to collect N191.57 billion. This represents a collection efficiency of 73.17%, a notable decrease of 4.42 percentage points compared to the previous month. This substantial sum of uncollected revenue, amounting to N70.25 billion, raises serious concerns about the financial health of the DisCos and their ability to invest in infrastructure upgrades and improve service delivery. The decline in collection efficiency, despite increased energy supply and billing, suggests systemic inefficiencies in revenue collection processes and potentially, challenges in enforcing payment compliance among consumers.
The increase in energy received by the DisCos, up by 5.80% to 2,774.49 gigawatt-hours, and the corresponding increase in the total energy billed, up by 3.25% to 2,255.51 gigawatt-hours, initially suggest positive developments. However, these gains are overshadowed by the declining billing efficiency, which fell to 81.29%, a 2.01 percentage point decrease from April 2025. This indicates that a significant portion of the received energy is not being effectively billed to consumers, further contributing to revenue losses. The gap between energy received and energy billed points towards technical losses in the distribution network, inaccurate metering, or other inefficiencies in the billing process.
The report further highlights a concerning trend in revenue recovery performance. While the regulator permitted an average tariff of N116.25 per kilowatt-hour, the DisCos only managed to collect an average of N82.05/kWh. This translates to a recovery efficiency of 70.58%, a significant drop of 7.32 percentage points compared to April 2025. This substantial difference between the allowed tariff and the actual amount collected reflects a critical challenge in the sector. The inability to recover the approved tariff undermines the financial viability of the DisCos and limits their capacity to invest in necessary improvements to the distribution infrastructure.
A closer look at individual DisCo performance reveals a disparity in their billing and collection efficiencies. Ikeja, Benin, and Eko DisCos demonstrated relatively better performance compared to others. Ikeja DisCo achieved the highest billing efficiency at 89.04%, indicating their effectiveness in billing for the energy they received. Eko DisCo led in recovery efficiency at 82.52%, followed closely by Ikeja DisCo at 81.55%. These figures suggest that while challenges exist across the sector, some DisCos are demonstrating better practices in billing and revenue collection. Analyzing the strategies employed by these higher-performing DisCos could offer valuable insights for improving performance across the sector.
In contrast, Yola and Jos DisCos continued to lag behind in key performance indicators. Jos DisCo recorded the lowest collection efficiency at a mere 35.55%, indicating significant challenges in collecting payments from consumers. Yola DisCo reported the lowest billing efficiency at 63.45%, highlighting issues in accurately billing for the energy supplied. The consistently poor performance of these DisCos underscores the need for targeted interventions to address their specific challenges. These interventions could include improving metering infrastructure, strengthening revenue collection mechanisms, and enhancing customer engagement to promote payment compliance. The overall picture presented by the report emphasizes the urgent need for comprehensive reforms and strategic interventions to address the systemic issues hindering the financial sustainability and operational efficiency of the Nigerian electricity distribution sector.
