For every N100 worth of electricity billed to customers last year, Nigeria’s electricity distribution companies collected only N77.60, leaving N22.40 unpaid.
The resulting revenue gap amounted to N669.49 billion in 2025, according to the Nigerian Electricity Regulatory Commission’s (NERC) 2025 Annual Report.
The unpaid bills increased by N132.54 billion from N536.95 billion in 2024, representing a 24.7 percent year-on-year rise.
DisCos billed customers N2.99 trillion during the year but collected N2.32 trillion, giving the sector a collection efficiency of 77.60 percent.
The increase in outstanding customer debt comes despite ongoing regulatory and government interventions designed to strengthen billing, metering and consumer protection across the electricity market.
NERC said the combination of billing and collection inefficiencies continued to weaken the liquidity of the Nigerian Electricity Supply Industry (NESI), limiting its capacity to support fresh investment.
Billing itself remains a problem
The collection gap is only one part of the revenue challenge.
DisCos supplied electricity valued at N3.68 trillion in 2025 but billed customers N2.99 trillion, resulting in a gross billing efficiency of 81.14 percent.
That left about N694.80 billion worth of electricity supplied but not billed.
The figures indicate that the industry is losing revenue both before and after bills reach consumers: some electricity is not converted into bills, while a significant portion of issued bills is not converted into cash.
This weakens the financial position of distributors and, by extension, their ability to meet obligations and invest in infrastructure.
N89.58bn market shortfall
The payment problem extends beyond consumers.
NBET and the Market Operator issued N1.72 trillion in gross invoices to DisCos in 2025 for energy costs and administrative services.
DisCos paid N1.63 trillion, representing 94.80 percent of their obligations and leaving N89.58 billion unpaid.
NERC classified the amount as an underpayment attributable to market participants.
The numbers point to a circular liquidity problem in which weak collections from customers can constrain the ability of distributors to meet their own obligations within the electricity market.
Metering investment
To improve billing and payment discipline, the Federal Government approved N28 billion in October 2025 under the Meter Acquisition Fund Tranche B scheme for the purchase and installation of prepaid meters.
NERC has also continued to strengthen consumer-protection measures, including directives requiring DisCos to complete refunds under amended orders within 12 months and apply the refunds directly to customers’ electricity bills.
These measures are unfolding alongside the broader restructuring enabled by the Electricity Act 2023, which opened the electricity market to greater participation by states and private entities.
But with unpaid electricity charges now approaching N670 billion, the ability of DisCos to turn energy supplied into billed and ultimately collected revenue remains central to the success of the sector’s reform programme.
Reform meets revenue reality
The revenue challenge comes as the Federal Government continues to implement reforms under the Electricity Act 2023, which replaced the Electric Power Sector Reform Act 2005.
Signed into law in June 2023, the legislation removed electricity from the Exclusive Legislative List, opening greater room for states and private investors to participate in electricity generation, transmission and distribution.
The reform agenda is intended to encourage competition, attract investment and expand electricity access. But NERC’s latest figures suggest that the financial health of the distribution segment remains a critical constraint to achieving those objectives.
A distribution market unable to convert a large proportion of billed electricity into cash has less capacity to fund metering, network upgrades, maintenance and other investments needed to improve service delivery.
Metering push
The government has also attempted to tackle some of the structural causes of revenue losses through increased metering.
In October 2025, the Federal Government approved N28 billion for DisCos under the Meter Acquisition Fund (MAF) Tranche B programme to procure and install prepaid meters.
The initiative is aimed at expanding metering and reducing reliance on estimated billing, one of the long-standing sources of disputes between electricity consumers and distributors.
NERC has separately introduced consumer-protection measures, including directives requiring DisCos to complete refunds under amended regulatory orders within 12 months, with the refunds applied directly to customers’ electricity bills.
However, stronger metering and billing systems will need to be matched by improved payment compliance if the sector is to translate higher billing into sustainable cash flows.
The pressure remains evident in more recent revenue data. NERC reported that DisCos generated N196 billion in revenue in February 2026, highlighting the continuing importance of collection performance to the financial stability of the electricity market.
