Nigeria Power Sector Crisis: DisCos Lose ₦2.3trn as Blackouts Intensify

Nigeria Power Sector Crisis: DisCos Lose ₦2.3trn as Blackouts Intensify

Nigeria’s electricity crisis has worsened significantly as Electricity Distribution Companies (DisCos) recorded a combined loss of ₦2.349 trillion over the past two years, driven by billing inefficiencies and weak revenue collection, further destabilising the Nigerian Electricity Supply Industry (NESI).

At a time when homes and businesses are already grappling with worsening power outages, the sector is now burdened by an estimated ₦6 trillion debt, pushing it closer to systemic failure and raising fresh concerns about the sustainability of electricity supply across the country.

Data from the Nigerian Electricity Regulatory Commission (NERC) show that DisCos posted ₦1.015 trillion loss in 2024, which surged by 31.4 per cent to ₦1.334 trillion in 2025. This brings the cumulative loss within the two-year period to ₦2.349 trillion, underscoring deep-rooted inefficiencies in the distribution segment of Nigeria’s power value chain.

A detailed breakdown of the 2025 figures highlights the scale of the problem. Losses from billing inefficiencies alone stood at ₦649.87 billion, while poor revenue collection accounted for ₦684.28 billion, reflecting persistent leakages that continue to drain the sector’s finances despite rising revenues.

Quarterly data further reveal fluctuations in losses throughout 2025. DisCos recorded ₦378.11 billion in the first quarter, followed by ₦344.7 billion in the second quarter. Losses declined by 18 per cent to ₦282.8 billion in the third quarter, before rising again by 16 per cent to ₦328.54 billion in the fourth quarter, indicating inconsistent operational performance.

The growing financial strain is now clearly impacting electricity generation and supply. Industry data show that average power generation has dropped from about 4,600 megawatts in 2025 to below 3,500MW in early 2026, worsening electricity shortages nationwide. Generation Companies (GenCos), which are owed over ₦6 trillion, are increasingly unable to sustain operations, forcing many plants to scale down output or shut down units intermittently.

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The situation has been compounded by gas supply constraints, as suppliers cut deliveries due to unpaid invoices. This has significantly reduced generation capacity and deepened the supply deficit, triggering a resurgence of rolling blackouts across the country.

As a result, many Nigerians now receive less than 12 hours of electricity daily, with some communities experiencing as little as four to six hours of supply. In parts of Abuja, including Karu and Lokogoma under the Abuja Electricity Distribution Company (AEDC), electricity supply reportedly drops to barely three hours daily, leaving residents and businesses struggling with rising energy costs.

Similarly, areas under the Benin Electricity Distribution Company (BEDC), including Ughelli, Warri, Sapele, and Oleh in Delta State, continue to face erratic power supply, with prolonged outages and widespread complaints over high estimated billing despite poor service delivery.

In a move that reflects declining confidence in the national grid, the Presidential Villa in Abuja has commenced plans to exit grid electricity entirely. The project involves a ₦17 billion solar hybrid mini-grid, designed to guarantee uninterrupted power supply to the seat of government and reduce dependence on the unstable grid.

However, the decision has drawn criticism from industry stakeholders, including officials of AEDC, who argue that improved investment in network upgrades and energy storage could have ensured stable supply without abandoning the grid.

Consumers and advocacy groups have continued to express frustration over the situation. The Electricity Consumers Association of Nigeria (ECAN) has accused DisCos of exploiting customers through estimated billing, which many describe as arbitrary and unfair. According to the association, inflated bills and poor service have contributed significantly to widespread resistance to payment, further worsening revenue collection challenges.

Energy experts have identified metering gaps as a major driver of the crisis. Without accurate metering, electricity consumption cannot be properly measured, leading to billing disputes and revenue leakages. Analysts insist that end-to-end metering across generation, transmission, and distribution is critical to restoring transparency and financial stability in the sector.

There are also growing concerns about the lack of strong policy direction and sustained reforms. Experts warn that the expectation of government bailouts may be encouraging inefficiency among operators, as stakeholders assume the Federal Government will continue to intervene financially to keep the sector afloat.

The deepening crisis highlights a dangerous cycle of financial losses, declining power generation, and worsening electricity supply, with far-reaching implications for Nigeria’s economy and quality of life.

Unless urgent reforms are implemented—including mass metering, improved revenue collection, cost-reflective tariffs, and stronger regulatory enforcement—Nigeria’s power sector risks sliding into a full-scale collapse, leaving millions of consumers in prolonged darkness.

Nigeria Power Sector Crisis: DisCos Lose ₦2.3trn as Blackouts Intensify