Electricity Distribution Companies: FG Releases Worrisome Report

The Federal Government has given what may pass as performance audit of electricity distribution companies in Nigeria.

The Minister of Power, Chief Adebayo Adelabu gave the assessment at a two-day retreat organised by the Senate Committee on Power

In the assessment, he submitted a verdict of poor performance in the activities of the electricity distribution companies in the Nigerian Electricity Supply Industry, (NESI), adding that this had been frustrating the efforts of the government to improve power supply.

In a statement, Special Adviser, Strategic Communication and Media Relations to the Minister, Bolaji Tunji, said the minister also spoke on the persistent crisis threatening to derail progress in the sector.

Linking this to what he described as chronic underinvestment in distribution infrastructure, he said it had continued to cripple service delivery nationwide in spite of landmark reforms in the electricity sector.

“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”, Adelabu said.

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According to the minister, by the spirit of the restructuring programme embarked by the Federal Governiment, the electricity distribution companies (DisCos) were supposed to have technical partners, but that a lot of them only showed partnership with foreign companies for about three months.

“Immediately they took over, those companies left. So we need utility companies that can invest in the sector to improve infrastructure, improve service”.

“A lot of them went to the banks to take loans to buy the assets, after taking over, instead of providing infrastructure they are taking out the money to pay the loans”.

The minister also spoke on the issue of tariff adjustment, saying that despite boosting market liquidity by 70 percent—raising sector revenue from 1 trillion in 2023 to 1.7 trillion in 2024—the distribution segment remains the weakest link.

“In the fourth quarter of 2024, DisCos in the North remitted just N124.4 billion (30 percent) of their 408.86 billion invoice, with Abuja DisCo accounting for 85 percent of Northern payments. Southern DisCos fared slightly better, remitting N254.6 billion (67 percent), though 70 percent of this came from Lagos DisCos alone.

“These discrepancies are due largely to crumbling infrastructure outside economic hubs, where underinvestment has left networks dilapidated”.