Nigeria’s embattled power distribution sector recorded a tentative but significant uptick in revenue collection during the second quarter of 2025, offering a glimmer of hope for a power industry long plagued by financial hemorrhaging and operational inefficiencies.
According to data released by the Nigerian Electricity Regulatory Commission (NERC), the country’s eleven distribution companies collectively pulled in N564.71 billion between April and June 2025—representing 76.07% of the N742.34 billion billed to consumers during that period.
While the figures may appear modest on paper, industry analysts say the 1.68 percentage point improvement in collection efficiency compared to the first quarter signals growing discipline within a sector that has historically struggled to translate power delivery into actual revenue.
Tale of Two Sectors
The report paints a picture of stark disparities across Nigeria’s distribution landscape. Three DisCos—Eko, Ikeja, and Port Harcourt emerged as clear frontrunners, demonstrating that efficient revenue collection is achievable even within Nigeria’s challenging operating environment.
Eko DisCo led the pack with an impressive 87.80% collection efficiency, maintaining its position as the sector’s gold standard. Port Harcourt DisCo posted the most dramatic turnaround, surging by 9.79 percentage points quarter-on-quarter, while Ikeja DisCo added 4.89 percentage points to its collection rate.
Other notable performers included Benin DisCo, which improved by 5.04 percentage points, and Ibadan DisCo, up 4.20 percentage points — suggesting that regional strategies for combating revenue leakage may be gaining traction.
“Three DisCos recorded collection efficiencies greater than 80%, with Eko recording the highest collection efficiency,” NERC confirmed in its quarterly assessment, underscoring the widening performance gap between leading and lagging operators.
The Laggards
However, the report also exposed persistent weaknesses in several franchise areas. Jos DisCo languished at the bottom with a dismal 43.82% collection rate — meaning more than half of all electricity supplied in its coverage area went unpaid for during the quarter.
Perhaps more concerning was the backward slide recorded by Abuja DisCo, which saw its collection efficiency drop by 3.93 percentage points despite serving the nation’s capital and its relatively affluent customer base. Jos DisCo also declined by 3.37 percentage points, extending its position as the sector’s worst performer.
NERC attributed these disappointing figures to a familiar litany of problems: operational inefficiencies, unresolved billing disputes, rampant energy theft, and critically low metering coverage that leaves millions of Nigerians subject to estimated billing — a practice that breeds distrust and non-payment.
Why Collection Efficiency Matters
The stakes extend far beyond the balance sheets of individual distribution companies. Collection efficiency is the lifeblood of Nigeria’s entire electricity value chain.
When DisCos fail to collect revenue, they cannot meet their financial obligations to the Transmission Company of Nigeria (TCN), the Nigerian Bulk Electricity Trading Company (NBET), and power generation companies (GenCos). This creates a vicious cycle: generators and gas suppliers go unpaid, leading to reduced power generation, which in turn fuels consumer anger and further reduces willingness to pay for electricity.
The regulator emphasized that improving collection rates, even incrementally, is “crucial for improving the liquidity of the electricity market”—regulatory speak for ensuring that money actually flows through the system to keep the lights on.
Cautious Optimism
The quarter-on-quarter improvement from 74.39% to 76.07% collection efficiency, while modest, represents approximately N11 billion in additional revenue captured by the sector — money that can theoretically be reinvested in infrastructure, metering programs, and customer service improvements.
Industry observers note that the gains achieved by top-performing DisCos demonstrate that progress is possible, even within Nigeria’s difficult operating environment characterized by inadequate power supply, forex volatility, and challenging socio-economic conditions.
However, with nearly a quarter of all electricity supplied still going uncollected — representing over N177 billion in revenue leakage during the quarter alone — the sector remains far from financial sustainability.
As Nigeria continues its broader electricity sector reforms, including the gradual removal of subsidies and the introduction of service-based tariffs in Band A areas, the ability of DisCos to efficiently collect revenue will remain a critical barometer of whether the country’s perennial power challenges can finally be addressed.
WHAT YOU SHOULD KNOW
Nigeria’s electricity distributors collected N564.71 billion in Q2 2025 — a modest improvement that masks a troubling reality: nearly one-quarter of all electricity supplied remains unpaid for, draining N177 billion from the sector.
While top performers like Eko DisCo (87.80%) prove efficient revenue collection is possible, the sector’s overall 76% collection rate remains dangerously inadequate. Until DisCos can consistently collect what they bill — particularly laggards like Jos DisCo at 43.82% — Nigeria’s electricity crisis will persist. You cannot fix a power sector that cannot pay its bills.
