Electricity Distribution Companies (DisCos) in Nigeria recorded a revenue shortfall of approximately ₦160 billion in the first three months (Q1) of 2026, highlighting the persistent liquidity crisis across the DisCos.
According to the Nigerian Electricity Regulatory Commission (NERC) Commercial Performance Factsheet, revenue losses across 11 distribution companies in January, February and March stood at ₦159.37 billion. This represents 21 per cent of ₦756.92 billion being total energy billed by the DisCos within the three-month period.
The Nigerian DisCos have continued to struggle with revenue recovery despite improvements in some operational metrics.
The total revenue collected by the Discos in the period was ₦597.55 billion.
In January 2026 alone, the DisCos billed a total of ₦268.20 billion but collected only ₦204.7 billion, resulting in a revenue shortfall of ₦63.46 billion. Collection efficiency stood at about 76.34 per cent, while revenue recovery efficiency fell to 69.2 per cent.
In February, the DisCos billed a total of ₦242.29 billion but collected ₦196.68 billion, recording another revenue gap of ₦45.61 billion despite improved collections (81.17 per cent collection efficiency) when compared with the previous month.
In March, the DisCos collected ₦196.13 billion out of a total of ₦246.43 billion billed to electricity customers, reflecting a shortfall of ₦50.3 billion. The billing and collection efficiencies dropped to 83.89 per cent and 79.59 per cent, respectively, in the third month.
Both billing and collection efficiencies vary across the DisCos. While some DisCos recorded improvement in collection, others declined. Ikeja DisCos recorded the highest collection efficiency (87.77 per cent) in January, Eko DisCo recorded the highest (94.12 per cent) in February, while Ikeja recorded the highest (96.38 per cent) in March. However, Kaduna DisCo recorded the lowest collection efficiency in the period, followed by Jos and Yola, as they continue to struggle with collection and recovery.
Apart from collection losses, the NERC reports also showed another layer of revenue shortfalls due to billing inefficiencies by the DisCos.
The NERC Commercial Factsheet for January showed that ₦336.43 billion was total energy received by the DisCos, but only ₦268.20 billion was billed, meaning ₦68.23 billion worth of energy was not billed. In February, ₦277.09 billion was the total energy received, but only ₦242.29 billion was billed to customers, reflecting ₦34.8 billion billing shortfall. Energy worth ₦293.76 billion was received by the DisCos in March, but ₦246.43 billion was billed to customers, reflecting a billing shortfall of ₦47.33 billion.
This means a total of ₦150.41 billion in potential revenue was lost due to billing inefficiencies by the distribution companies.
Why DisCos Record Shortfalls
Industry analysts have attributed the revenue shortfalls recorded by the DisCos to several factors, including poor collection rates (not all billed customers pay their electricity bills), metering gaps (over 5 million customers remain unmetered and are billed on estimates, creating disputes and payment resistance), energy theft (illegal connections and meter tampering) and technical and commercial losses (a substantial portion of electricity supplied is either lost on the network or not billed effectively).
Revenue shortfalls affect the entire power value chain. When DisCos cannot recover enough revenue, they struggle to pay generation companies and transmission operators, limiting investment in infrastructure, metering, and network upgrades. This contributes to persistent power supply challenges and liquidity problems across the sector.
Despite these shortfalls, DisCos have seen substantial revenue growth in recent years, largely due to tariff adjustments and Band A implementation. However, revenue collection remains uneven across the country.
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The revenue challenges come amid concerns over persistent power outages, which affect households and businesses. In the first quarter of the year, power generation dropped from about 4,000MW to 2,000MW, causing nationwide blackouts at some points.
The DisCos have in different notices, attributed the outages to the collapse of the national grid caused by either gas supply shortage or tripping as a result of technical faults on the transmission facilities and vandalization by criminals.
The power outages have led to expression of frustration by customers, especially those on Band A promised 20 hours of supply daily while they paid a tariff as high as ₦270 per kilowatt hour, more than 300 per cent hike from the previous rates two years ago.
In several social media posts with the first quarter of this year, Band A customers have queried the justification for keeping them on Band A with a high tariff when the DisCos have failed to meet the demand.
Energy experts have repeatedly called for deliberate efforts towards investing in power infrastructure upgrades, improved metering, tighter enforcement against energy theft, and better customer service to boost revenue collection rates.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X