The Nigerian Electricity Regulatory Commission (NERC) has reported a remarkable 48% increase in revenue generated by the 11 electricity distribution companies (DisCos) during the second quarter of 2024. This surge is attributed to recent tariff hikes for Band A customers, a decision taken in light of escalating electricity generation costs that could have pushed the federal government’s subsidy payments to over N2 trillion by year-end.**
According to NERC’s second quarter report, revenue from the DisCos rose from N291.62 billion in the first quarter of 2024 to N431.16 billion in the second quarter. This amount represents 79.31% of the total N543.64 billion billed to customers during the same period, indicating a strong performance in revenue collection across the sector.
The report highlights the varying efficiencies of the different DisCos in collecting revenue. Ikeja DisCo led the pack with an impressive collection efficiency of 94.67%, followed closely by Eko DisCo at 88.03%. In contrast, Yola DisCo lagged significantly, recording the lowest collection efficiency at just 55.67%.
NERC also pointed out that the federal government had to pay N380.06 billion in subsidies due to the lack of cost-reflective tariffs across all DisCos. This subsidy system has been a point of concern, as it highlights the ongoing challenges within Nigeria’s electricity sector regarding pricing and revenue generation.
The revenue increase signals a positive trend for the DisCos, suggesting that the recent tariff adjustments are starting to yield results. However, the need for further reforms and the implementation of cost-reflective tariffs remains critical to ensuring the long-term sustainability of the electricity sector and reducing the dependency on government subsidies.
