Nigeria’s electricity distribution companies (DisCos) recorded a sharp increase in revenue over the past eight years, but the growth has not translated into a comparable improvement in electricity supply, raising fresh questions about service delivery, infrastructure investment and consumer protection in the power sector.
Revenue collected by Nigeria’s electricity Distribution Companies (DisCos) rose by approximately 450 per cent, from ₦218.16 billion in the first half of 2018 to ₦1.2 trillion in the corresponding period of 2026, according to data from the Nigerian Electricity Regulatory Commission (NERC).
An analysis of the figures by Financial Vanguard showed that revenue increased by about ₦983.04 billion over the period, while total electricity supply grew by only 4.8 per cent, from 16,861 gigawatt-hours (GWh) in the first half of 2018 to 17,668 GWh in the first half of 2026.
The figures have intensified concerns over whether the rising amounts collected from electricity consumers are delivering commensurate improvements in power availability and quality of service, more than a decade after the privatization of the sector.
Average available generation capacity also declined by approximately 41 per cent, from 7,565.5 megawatts (MW) in the first half of 2018 to 4,456 MW in the corresponding period of 2026.
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The widening gap between revenue collection and electricity supply has renewed calls for stronger regulatory oversight, improved investment in distribution infrastructure and greater accountability from operators.
DisCos’ Annual Revenue Rises to ₦2.32 Trillion
The trend is also evident in the annual figures. DisCos’ revenue increased by approximately 666 per cent, from ₦302.93 billion in 2016 to ₦2.32 trillion in 2025.
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During the same period, annual electricity supply rose from 23,742 GWh to 31,251 GWh, representing an increase of about 31.6 per cent.
NERC data showed that DisCos’ revenue climbed from ₦370.46 billion in 2017 to ₦448.75 billion in 2019 and ₦542.73 billion in 2020. Collections subsequently rose to ₦775.34 billion in 2021 and ₦841.81 billion in 2022.
The upward trend continued, with revenue reaching ₦1.08 trillion in 2023, ₦1.66 trillion in 2024 and ₦2.32 trillion in 2025.
Electricity supply, however, followed a less consistent trajectory. Annual supply rose to 33,489.17 GWh in 2019 and 35,242.17 GWh in 2020 before reaching 36,710.60 GWh in 2023.
Supply peaked at 37,093.70 GWh in 2024 before falling to 31,251 GWh in 2025, a decline of approximately 15.7 per cent.
The decline occurred even as DisCos’ revenue increased from ₦1.66 trillion in 2024 to ₦2.32 trillion in 2025, further highlighting the disconnect between the growth in collections and the volume of electricity supplied.
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Thirteen Years After Privatization, Concerns Persist
Nigeria’s power sector was largely privatized in November 2013, when generation plants and the country’s 11 distribution companies were handed over to private investors. The Federal Government retained control of the transmission segment.
The reform was intended to improve efficiency, attract private investment and strengthen electricity delivery through a commercially driven electricity market.
However, concerns remain over the pace of improvement, despite more than ₦10 trillion in public investment reportedly directed at the sector.
In 2016, three years after privatization, the average available generation capacity of 27 power plants stood at 7,527 MW, while average actual generation was 3,276 MW.
By 2025, installed generation capacity had exceeded 13,000 MW, but average available capacity had fallen by 28.3 per cent to 5,398 MW. Average generation increased to 4,475 MW.
The figures point to persistent challenges in converting installed capacity into dependable electricity supply, with the performance of generation, transmission and distribution infrastructure remaining central to the sector’s difficulties.
The Rural Electrification Agency (REA) has also estimated that approximately 85 million Nigerians still lack access to electricity, underscoring the scale of the country’s energy access challenge.
DisCos Fail to Collect ₦700.53 Billion
Beyond the questions surrounding revenue growth, collection efficiency remains a major concern.
NERC data showed that in the first half of 2026, DisCos received energy valued at approximately ₦1.9 trillion but collected only about ₦1.2 trillion from consumers, leaving ₦700.53 billion uncollected.
The shortfall highlights the financial pressures within the electricity market, where collection challenges, outstanding obligations and the cost of maintaining infrastructure continue to affect the financial position of market participants.
Meanwhile, debts owed by the Federal Government to electricity generation companies have also placed pressure on the sector, with the outstanding amount reportedly reaching about ₦6 trillion by the end of 2025.
FG Turns to Bonds to Address Power Sector Debt
In response to the mounting liabilities, the Federal Government has pursued a debt-reduction programme aimed at settling verified legacy obligations to generation companies and restoring liquidity to the electricity market.
In September 2026, the government signed a ₦728.979 billion Series 2 bond under its ₦4 trillion Power Sector Debt Reduction Programme.
The transaction comprised ₦402 billion in cash bonds raised from the domestic capital market and ₦326.979 billion in non-cash bonds allotted to participating generation companies.
The Managing Director and Chief Executive Officer of Nigerian Bulk Electricity Trading Plc (NBET), Akin Odeyemi, said the initiative was part of efforts to address outstanding obligations to generation companies and their associated gas suppliers.
Odeyemi said NBET had commenced settlement of participating generation companies and gas companies following the successful issuance and signing of the bonds.
He described the development as a significant step in implementing the Presidential Power Sector Debt Reduction Programme under President Bola Ahmed Tinubu’s administration.
NERC’s 2025 industry report put the Federal Government’s gross tariff subsidy obligation at ₦1.928 trillion for the year, representing 57.44 per cent of the total NBET invoice.
The amount translated to an average monthly subsidy obligation of ₦160.69 billion. The obligation stood at ₦536.40 billion in the first quarter, ₦514.36 billion in the second, ₦458.76 billion in the third and ₦418.79 billion in the fourth quarter.
The 2025 figure represented a slight decrease from the ₦1.949 trillion subsidy obligation recorded in 2024.
Power Minister Insists Supply Is Improving
Despite persistent complaints over electricity availability, the Minister of Power, Mr Joseph Tegbe, has maintained that supply has improved in recent months.
Tegbe acknowledged that some parts of the country continued to experience poor electricity supply but said the government was working to address the challenges.
According to the minister, operational reports showed that generation and transmission had exceeded 5,000 MW over several weeks, compared with the 3,700 MW to 4,700 MW range recorded before June. He also cited a generation peak of 5,330 MW during August and September.
He said the government’s priority was to sustain the improvement and ensure that increased generation translated into more dependable electricity for consumers.
Tegbe identified stabilizing the electricity value chain, restoring market discipline and strengthening governance as the three main pillars of the government’s intervention.
Among the measures highlighted was the restoration of the 375 MW Alaoji open-cycle power plant to the national grid after three years offline.
The minister also said new transformers had been commissioned at Apapa, Ijora, Alausa and Lekki in Lagos, unlocking 672 MW of transmission capacity. A new 300 MVA transformer at Katampe in Abuja had also been energized, unlocking another 240 MW of transmission capacity.
On renewable energy, Tegbe said the completed electrification portfolio under the REA and its partners comprised 62 solar and mini-grid installations across 30 states. The projects represented about 43.6 MW of installed solar capacity and 41,735 new connections, with an estimated reach of more than 208,000 people.
Babalola Says Electricity Reforms Remain Incomplete
Special Adviser to the President on Power and Chairman of the Presidential Task Force on Power Sector Reset and Restoration, Dr Lanre Babalola, said Nigeria’s electricity reforms remained unfinished.
Babalola argued that the country’s electricity challenge was not simply a question of insufficient generation capacity but also the inability to consistently convert available capacity into reliable power, commercial value and sustainable investment.
He noted that the unbundling of the former vertically integrated utility, privatization of generation and distribution assets, and establishment of a bulk electricity trader were intended to pave the way for a more competitive electricity market.
However, he said the transition had not been fully completed.
Babalola described the single-buyer model as a transitional arrangement designed to allow market participants to develop the creditworthiness needed for direct contracting.
He warned that a mechanism intended to facilitate a transition could become a structural constraint if the transition never took place.
His comments point to the need for deeper market reforms, improved financial sustainability and stronger commercial relationships among participants in the electricity industry.
‘Nigerians Have Been Paying for Darkness’ — Fadipe
Reacting to the revenue figures, lawyer and Lead Consultant on Power Sector matters at Sage Consulting, Mr Bode Fadipe, questioned whether electricity consumers were receiving value commensurate with the money they paid.
Fadipe said the figures reinforced concerns about the quality of service delivered by distribution companies.
“What this data has just confirmed is that Nigerians have been paying for darkness,” he said.
He identified inadequate investment as one of the major factors limiting improvements in electricity supply. He also backed the enforcement of NERC’s directive requiring DisCos to retain part of their revenue for investment.
According to Fadipe, the regulator had insisted on implementing the directive despite objections from distribution companies.
However, he said the extent to which the companies had complied with the investment requirements still needed to be established.
He called on NERC to strengthen monitoring, enforce its investment directives and establish clear timelines for improvements in service delivery.
Fadipe also advocated forensic audits of DisCos’ investments to determine whether funds earmarked for infrastructure development were being properly utilized.
He further urged the regulator to work with market participants to address outstanding debts and improve the financial sustainability of the electricity market.
Consumer Advocates Demand Stronger Protection
Consumer rights advocate and Executive Director of the Electricity Consumer Protection Advocacy Centre, Chief Princewill Okorie, also raised concerns over the quality of service delivered to electricity consumers.
Okorie said the decentralization of the electricity sector under the new legal framework had brought regulation closer to consumers at the state level, but argued that enforcement of consumer protection provisions remained a major challenge.
He cited complaints involving estimated billing, infrastructure charges and alleged non-compliance with regulatory directives.
Okorie alleged that residents in some communities had been compelled to contribute money towards transformers and other distribution infrastructure, despite obligations placed on distribution companies under applicable regulations.
He argued that the recurring claim that consumers were failing to pay their electricity bills should be considered alongside questions about how those bills were generated and whether the charges were justified.
“The appropriate question to ask is: how did they generate these bills? Were they justifiably, accountably and transparently generated?” he said.
Okorie called for stricter enforcement of electricity regulations, improved consumer education and stronger protection for rural electricity users.
He also advocated a dedicated mechanism for investigating alleged electricity-related violations and questioned the absence of a dedicated consumer protection unit within the Federal Ministry of Power.
The consumer advocate further argued that the provision of equipment such as poles, cables and transformers by consumers raised questions about the responsibilities of distribution companies and the effectiveness of existing consumer protection arrangements.
Accountability Remains Central to Power Sector Reform
The widening difference between electricity revenue and supply has placed renewed attention on the performance of Nigeria’s power sector more than a decade after privatization.
Although DisCos’ collections have risen substantially, the available figures show that electricity supply has not grown at a comparable pace, while generation capacity, infrastructure investment, outstanding debts and consumer complaints remain significant concerns.
The government has pointed to interventions aimed at restoring generation capacity, upgrading transmission infrastructure, expanding renewable energy access and settling legacy debts.
However, industry stakeholders and consumer advocates continue to call for stronger regulation, transparent billing, verifiable infrastructure investment and measurable improvements in electricity delivery.
For millions of Nigerians who continue to experience unreliable power supply or lack access to electricity altogether, the central question remains whether increased revenue collections and government interventions will translate into dependable, affordable and accountable electricity service.
