Nigeria’s electricity distribution companies collected N1.2tn from consumers in the first half of 2026, up from N218.16bn in the corresponding period of 2018, despite electricity supply increasing by only 4.8 per cent over the eight-year period.
Data from the Nigerian Electricity Regulatory Commission analysed by Financial Vanguard showed that revenue collected by the 11 distribution companies, known as DisCos, rose by approximately 450 per cent, while electricity supplied to consumers increased from 16,861 gigawatt-hours (GWh) to 17,668GWh.
The figures have raised questions about the performance of Nigeria’s power sector, 13 years after privatisation, as consumers continue to grapple with unreliable electricity supply.
The report also showed that DisCos failed to collect N700.53bn of the N1.9tn worth of electricity supplied to them between January and June 2026. The companies collected approximately N1.2tn, leaving a substantial gap between the value of electricity received and payments recovered from customers.
Over a longer period, annual revenue collected by DisCos climbed from N302.93bn in 2016 to N2.32tn in 2025, representing an increase of about 666 per cent. However, electricity supply grew by 31.6 per cent, from 23,742GWh to 31,251GWh, during the same period.
The disparity was particularly evident in 2025, when electricity supply fell by approximately 15.7 per cent from the previous year, even as revenue increased from N1.66tn to N2.32tn.
Average available power generation capacity also declined. NERC data showed that it fell from 7,565.5 megawatts in the first half of 2018 to 4,456MW in the corresponding period of 2026, representing a reduction of about 41 per cent.
The Rural Electrification Agency estimates that approximately 85 million Nigerians still lack access to electricity, highlighting the scale of the country’s power supply challenges.
The Federal Government is also facing mounting financial obligations to electricity generation companies, with outstanding debts estimated at about N6tn at the end of 2025.
According to NERC’s 2025 industry report, the government’s gross tariff subsidy obligation reached N1.928tn that year, equivalent to 57.44 per cent of the total invoice issued by the Nigerian Bulk Electricity Trading Plc.
In September 2026, the government signed a N728.979bn Series 2 bond under its N4tn Power Sector Debt Reduction Programme to settle verified outstanding debts owed to generation companies.
The transaction comprised N402bn in cash bonds raised from the domestic capital market and N326.979bn in non-cash bonds allocated to participating generation companies.
The Managing Director of NBET, Akin Odeyemi, said the company had begun settling participating generation companies and their associated gas suppliers following the successful issuance of the bonds.
Despite concerns about the sector’s performance, the Minister of Power, Joseph Tegbe, said electricity generation and transmission had exceeded 5,000MW in recent weeks, compared with levels of between 3,700MW and 4,700MW before June.
He added that generation reached a peak of 5,330MW during August and September, noting that the government’s priority was to sustain the improvement and translate it into more reliable electricity for consumers.
Tegbe said the government had restored the 375MW Alaoji open-cycle power plant after three years out of service. He also cited transformer upgrades in Lagos and Abuja that increased available transmission capacity.
The minister further disclosed that 62 solar and mini-grid installations across 30 states had delivered approximately 43.6MW of solar capacity and 41,735 new electricity connections, reaching an estimated 208,000 people.
However, Special Adviser to the President on Power and Chairman of the Presidential Task Force on Power Sector Reset and Restoration, Lanre Babalola, said Nigeria’s electricity challenges went beyond inadequate generation capacity.
He argued that the sector had yet to develop a system capable of consistently converting available power into reliable supply, commercial returns and sustainable investment.
Babalola also said the reforms introduced during privatisation remained incomplete, particularly the transition towards a competitive electricity market.
Power sector consultant Bode Fadipe said the revenue figures raised questions about the value consumers received for their payments. He urged the Nigerian Electricity Regulatory Commission to strengthen enforcement of investment requirements for distribution companies, establish clear deadlines for service improvements and conduct forensic audits to determine how infrastructure funds were being used.
Fadipe also called for closer oversight of DisCo investments and measures to address outstanding debts across the electricity market.
Similarly, consumer rights advocate and Executive Director of the Electricity Consumer Protection Advocacy Centre, Princewill Okorie, called for stronger protection for electricity users, particularly those in rural communities.
He raised concerns about estimated billing, charges for distribution infrastructure and alleged non-compliance with regulatory directives. He also called for greater transparency in billing and stronger mechanisms for investigating consumer complaints.
Okorie argued that consumers should not be held solely responsible for the sector’s financial difficulties without examining whether bills were fairly calculated and whether distribution companies were meeting their service obligations.
