Nigeria’s electricity distribution companies (DisCos) recorded a combined N80.49 billion revenue shortfall in February 2026, highlighting persistent financial fragility in the power sector despite measurable improvements in operational efficiency.
According to the Nigerian Electricity Regulatory Commission (NERC), the 11 DisCos received electricity valued at N277.09 billion from the national grid during the month, a 17.64 per cent increase from N235.53 billion in January. However, only N242.29 billion was billed to customers, while actual collections stood at N196.68 billion, reflecting continued leakages across the value chain.
The figures translate to a billing efficiency of 87.44 per cent and a collection efficiency of 81.17 per cent, with overall revenue recovery efficiency averaging 80.67 per cent across the industry.
The February data highlighted improving operational metrics alongside weakening revenue performance. While collection efficiency improved by 4.84 percentage points month-on-month, total revenue collected declined by 3.94 per cent compared to January.
NERC noted that average tariff realisation improved significantly, with actual collections rising to N100.27 per kilowatt-hour, a 16.64 per cent increase from the previous month. This contributed to an 11.51 percentage-point increase in overall revenue recovery efficiency.
Despite these gains, a pricing gap persists. The allowed average tariff stood at N124.30/kWh, indicating that DisCos are still unable to fully recover costs from customers.
Further compounding the challenge is a reduction in government support. Subsidy per unit fell to N24.03 in February from N38.33 in January, a decline of N14.30, placing additional pressure on operators’ balance sheets.
Operational performance varied significantly across the distribution companies. Eko, Kano, and Abuja DisCos recorded the highest billing efficiencies at 97.20 per cent, 99.04 per cent, and 93.70 per cent respectively, demonstrating stronger metering and billing systems.
At the other end of the spectrum, Yola and Kaduna DisCos posted the weakest billing efficiencies at 66.09 per cent and 72.46 per cent, reflecting structural and operational constraints.
Collection performance followed a similar pattern. Eko DisCo led with 94.12 per cent collection efficiency, followed by Abuja at 89.28 per cent, while Kaduna DisCo lagged significantly at 49.27 per cent.
In terms of cost recovery, Eko DisCo exceeded expectations with a recovery efficiency of 100.67 per cent, surpassing the allowed tariff benchmark, whereas Kaduna recorded the weakest performance at 41.20 per cent.
A deeper analysis of the data reveals widening disconnects between energy supply and revenue realisation. While energy received rose by N41.56 billion (17.64 per cent), billings declined by N25.79 billion (9.66 per cent) and collections fell by N8.09 billion (3.94 per cent).
This divergence points to underlying issues including weak demand, collection losses, and constrained consumer liquidity, all of which continue to limit the sector’s financial viability.
NERC disclosed that reduced Aggregate Technical, Commercial and Collection (ATC&C) loss targets averaging 16.64 per cent have been approved for 2026, reflecting anticipated efficiency gains from investments made by DisCos in 2025.
