Electricity consumers across Nigeria accumulated a debt of N54.18 billion in February 2025, failing to pay the full cost of power consumed within the month, according to the latest data released by the Nigerian Electricity Regulatory Commission (NERC). The February Factsheet published by the Commission underscores persistent challenges in revenue recovery within the power sector despite marginal improvements in collection and billing efficiency.
The NERC report disclosed that a total of N245.93 billion worth of electricity was billed to consumers by the country’s 12 Distribution Companies (Discos), but only N191.75 billion was recovered, translating to a collection efficiency of 77.9%. This reflects a 6.56% increase in revenue recovery from January 2025, indicating slight progress in cash collection amidst broader structural issues.
In terms of energy distribution, Nigeria’s Discos received a cumulative 2,583.19 gigawatt-hours (GWh) of energy, out of which 2,137 GWh was billed to end-users, signaling a billing efficiency of 82.73% – a 1.81% improvement over the previous month.
However, a deeper look at tariff dynamics reveals continued inefficiencies. Although the average allowed tariff across the country stood at N116.18/kWh, Discos were only able to collect an average of N88.21/kWh, showing a recovery efficiency of 75.9%, an improvement of 10.5% over January.
Significant performance discrepancies remain among the 12 Discos. Abuja Electricity Distribution Company (AEDC) led the chart with the highest collection efficiency of 89.03%, recovering N31.7 billion out of N35.67 billion billed. Eko Disco followed closely with 88.76%, while Enugu Disco recorded 88.47%, having collected N15.88 billion from N17.95 billion billed.
In contrast, Aba Power, despite having the highest allowed tariff of N200.88/kWh, posted the lowest collection efficiency at 53.90%. The company billed N6.44 billion but recovered only N3.47 billion, exposing challenges in cost recovery even with premium pricing.
Other notable performers include:
Ikeja Electric: Billed N41.18bn; recovered N33.35bn (81% efficiency)
Ibadan Disco: Billed N26.88bn; recovered N19.28bn (71.72% efficiency)
These figures highlight an uneven landscape of operational performance and revenue recovery across Nigeria’s power distribution subsector.
One of the core issues contributing to payment shortfalls is Nigeria’s lingering metering gap. With over seven million electricity users still unmetered, the reliance on estimated billing continues to fuel distrust and disputes between consumers and Discos. Customers frequently argue that the arbitrary nature of estimated bills does not reflect actual power consumption, leading to non-payment or underpayment of bills.
This metering deficit has prompted regulatory scrutiny. In recent months, NERC sanctioned eight Discos for overbilling practices, reinforcing calls for stricter consumer protection measures and the acceleration of the National Mass Metering Programme (NMMP).
Amid these setbacks, players in the off-grid and mini-grid space appear to be gaining ground. The Managing Director of the Rural Electrification Agency (REA), Abba Aliyu, recently stated that private sector mini-grid investors are achieving over 95% collection efficiency, thanks to full metering and transparent tariff systems.
This has fueled discussions about incentivizing private sector-led electrification efforts, particularly in underserved communities, as a viable complement to the national grid.
With mounting consumer debt and persistent infrastructure challenges, experts argue that improving billing transparency, expanding metering coverage, and strengthening regulatory oversight are critical for sustaining Nigeria’s power sector reforms. Furthermore, resolving the estimated billing problem could significantly improve consumer trust and increase revenue inflow.
As electricity demands continue to rise, bridging the gap between energy supplied and revenue collected remains a central challenge. Whether the Discos can continue improving their performance or face stricter regulatory action will be pivotal in shaping the future of Nigeria’s energy economy.