The Nigerian Federal Government has expressed profound dissatisfaction with the performance of electricity distribution companies (DisCos) within the Nigerian Electricity Supply Industry (NESI), citing it as a major impediment to the nation’s power sector progress.
At a recent two-day retreat convened by the Senate Committee on Power, the Minister of Power, Chief Adebayo Adelabu, sharply criticised the DisCos for obstructing government efforts aimed at enhancing electricity supply nationwide.
In a statement released by Bolaji Tunji, Special Adviser on Strategic Communication and Media Relations to the Minister, Chief Adelabu highlighted the chronic underinvestment in distribution infrastructure as a persistent crisis threatening to derail the sector’s development, despite landmark reforms.
He drew attention to glaring disparities among DisCos’ performances, noting that ageing networks, widespread electricity theft, and inadequate investment have deepened the sector’s reliance on unsustainable subsidies and left millions of Nigerians without reliable power.
“We need to get tough with the DisCos, as they can easily frustrate all the gains we have made. They have disappointed us in performance expectations. Whatever we do in generation does not mean anything to consumers if it is frustrated at the distribution points,” Chief Adelabu said.
Reflecting on the sector’s restructuring since 2003, he noted, “The DisCos were supposed to have technical partners, but many showed partnerships with foreign companies that lasted only about three months. Immediately they took over, those companies left.” He added, “We need utility companies that can invest in the sector to improve infrastructure and service. Unfortunately, many went to banks to take loans to buy assets, but instead of improving infrastructure, they are diverting funds to repay loans.”
Despite tariff adjustments that improved market liquidity by 70 percent — increasing sector revenue from ₦1 trillion in 2023 to ₦1.7 trillion in 2024 — the distribution segment remains the sector’s weakest link.
Chief Adelabu disclosed regional discrepancies in remittances: in the fourth quarter of 2024, Northern DisCos remitted only ₦124.4 billion (30 percent) of their ₦408.86 billion invoices, with Abuja DisCo accounting for 85 percent of these payments. Southern DisCos performed marginally better, remitting ₦254.6 billion (67 percent), although 70 percent of this was attributable to Lagos DisCos alone. “These discrepancies are largely due to crumbling infrastructure outside economic hubs, where underinvestment has left networks dilapidated,” he explained.
A major contributor to revenue loss and consumer distrust is the persistent metering gap. To address this, the government has launched a ₦700 billion Presidential Metering Initiative (PMI), backed by the World Bank, targeting the installation of 4.3 million meters by 2025. So far, 75,000 meters were deployed in April 2024, with an additional 200,000 units expected in May.
“Closing this gap is fundamental to fair billing and financial sustainability,” the Minister acknowledged, “but we are not there yet due to underinvestment and operational inefficiencies.”
The sector is also burdened by a ₦4 trillion subsidy backlog owed to generation companies, including ₦1.94 trillion for 2024 alone. With monthly subsidy shortfalls now reaching ₦200 billion, Chief Adelabu warned that maintaining current tariffs is “unsustainable,” placing enormous strain on public funds required for infrastructure upgrades.
“To salvage the sector, we will soon embark on restructuring underperforming DisCos and tighten enforcement of performance benchmarks. However, without urgent capital injection into distribution networks, gains in generation—including a historic 6,003MW output in March 2025—and transmission upgrades, such as 61 new transformers deployed in 2024, will fail to translate to reliable household supply,” he emphasised.
Plans to attract private investment into grid infrastructure and regionalise transmission networks were also highlighted as critical steps to reduce risks of failure. The Minister noted that the 70 percent remittance rate by the two Lagos DisCos reflects better infrastructure than what is observed in northern networks.
Chief Adelabu appealed to the National Assembly to enact stricter legislation to protect Nigeria’s power infrastructure from vandalism, stressing the importance of robust laws to deter the destruction of vital energy assets and ensure stable electricity supply nationwide.
