NIGERIA’S electricity distribution companies (DisCos) failed to collect N387.19 billion of the N2.01 trillion billed to customers between January and August 2026, despite recovering N1.63 trillion within the eight-month period, latest data from the Nigerian Electricity Regulatory Commission (NERC) have shown.
The figures highlight the persistent difficulty of converting electricity supplied to consumers into revenue, even as collection performance improved towards the end of the period.
The 11 DisCos collected N220.93 billion in August, their highest monthly revenue in the eight months, representing a 7.49 percent increase from N205.53 billion in July.
The August performance also marked a 7.91 percent increase over the N204.74 billion collected in January, indicating a stronger revenue recovery in the latest month.
According to NERC’s August 2026 commercial performance factsheet, the companies’ collection efficiency improved to 84.62 percent from 81.95 percent in July.
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This means the distribution companies recovered approximately 85 kobo for every N1 billed to customers during August, leaving about 15 kobo outstanding.
However, the improvement in collections was accompanied by substantial billing losses, with the DisCos failing to bill customers for a significant portion of the electricity supplied to them.
The companies received electricity valued at N346.49 billion in August but issued bills worth only N261.10 billion, leaving N85.39 billion unbilled.
Consequently, their billing efficiency stood at 75.36 percent, marginally higher than the 75.10 percent recorded in July.
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Of the N261.10bn billed, only N220.93 billion was recovered, leaving another N40.17 billion outstanding.
The figures expose two major revenue challenges confronting the distribution segment of Nigeria’s electricity market: the inability to bill customers for all electricity received and the failure to collect the full value of bills issued.
Performance variations
Performance also varied considerably across the distribution companies.
Eko Electricity Distribution Company led the industry with a collection efficiency of 96.29 percent, meaning it recovered almost all the revenue billed during the month.
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Ikeja Electric followed with 84.22 percent, while Abuja Electricity Distribution Company recorded 83.63 percent.
Kaduna DisCo posted the weakest performance, recovering just 41.90 percent of its billed revenue. Jos DisCo followed with 52.80 percent, while Kano DisCo recorded 60.98 percent.
The wide differences underline the uneven capacity of distribution companies to recover revenue, with some operators performing more than twice as well as others.
Beyond the amount collected against bills, NERC’s figures showed that the industry’s revenue recovery efficiency increased to 77.63 percent in August from 74.91 percent in July.
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The regulator put the average allowed tariff at N130.15 per kilowatt-hour, compared with an actual average collection of N101.03 per kilowatt-hour.
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This indicates that the industry recovered considerably less per unit of electricity than the average tariff approved by the regulator.
The monthly collection figures further illustrate the volatility of revenue generation across the sector.
The 11 DisCos collected N204.74 billion in January, but receipts declined to N196.68 billion in February and N196.13 billion in March, bringing first-quarter collections to N597.55 billion.
Collections subsequently improved to N203.61 billion in April and N208.15 billion in May before falling to N191.86 billion in June, the weakest monthly performance during the period.
The recovery resumed in July, when collections increased to N205.53 billion, before reaching N220.93 billion in August.
The August figure was N29.07 billion higher than June’s collection, representing an increase of 15.15 percent in two months.
The improvement suggests that the distribution companies have made some progress in recovering payments, although the overall performance remains constrained by billing and collection inefficiencies.
The revenue shortfall has wider implications for the electricity market because distribution companies occupy a critical position in the sector’s payment chain. Their ability to collect money from consumers affects their capacity to meet financial obligations to other market participants, including generation and transmission companies.
“Persistent revenue leakages also complicate efforts to improve the financial sustainability of the power sector, particularly as operators face mounting costs associated with electricity procurement, infrastructure maintenance and service delivery,” said a power sector analyst, Dr Pearce Darlington.
While the August figures indicate an improvement in collections, the N387.19 billion outstanding from customers over the first eight months underscores the scale of the industry’s revenue recovery challenge.
