Nigeria’s electricity distribution companies ended 2025 with a bigger problem than tariffs or vandalism: they simply cannot collect the money they are owed. According to NERC’s 2025 Annual Report, DisCos left ₦669.49 billion in billed electricity charges uncollected. That is 24.7% worse than the ₦536.95 billion they failed to collect in 2024.
The numbers expose a sector running on leaks. In 2025, DisCos supplied electricity worth ₦3.68 trillion. But they only billed customers ₦2.99 trillion, meaning ₦694.8 billion worth of power was never billed at all. Of what was billed, they collected just ₦2.32 trillion. Collection efficiency stood at 77.60%. In plain terms, for every ₦100 DisCos put on a bill, ₦22.40 never came back. Add billing and collection losses together and the industry lost over ₦1.36 trillion in potential revenue in one year.
This is not a teething problem. It is a liquidity crisis. The unpaid bills are not sitting in a government account waiting to be reconciled. They represent cash that DisCos need to pay NBET and the Market Operator for bulk power. In 2025, NBET/MO invoiced DisCos ₦1.72 trillion. The DisCos remitted ₦1.63 trillion, leaving a shortfall of ₦89.58 billion. That gap is the direct result of consumers not paying and DisCos not billing. NERC itself said the combination of billing and collection inefficiencies “continued to weaken the financial liquidity of the Nigerian Electricity Supply Industry, limiting its capacity to support new investments.”
The irony is that this is happening two years after the Electricity Act 2023 was signed to liberalize the sector, attract private capital, and expand access. Instead, the fundamental commercial discipline is getting worse. Collection efficiency of 77.6% is an improvement in percentage terms, but the absolute value of unpaid bills still rose by ₦132.54 billion. That means the market grew, but so did the hole in its pocket.
Critical questions arise. First, why is billing efficiency stuck at 81.14%? With ₦694.8 billion of energy supplied but unbilled, we are talking about massive commercial losses from estimated billing, illegal connections, and weak metering. The Federal Government’s ₦28 billion Meter Acquisition Fund disbursed in October 2025 was meant to address this. The impact is clearly not showing yet.
Second, why are collection rates collapsing in absolute terms when tariffs have been raised for Band A customers? If consumers on cost-reflective tariffs still do not pay, and the majority on estimated billing pay even less, then the entire tariff reform is undermined. DisCos cannot become bankable if one in five naira billed is a bad debt.
Third, what happens to investment? No private investor will put fresh capital into distribution when 22% of revenue evaporates annually and the upstream market is already owed ₦89.58 billion. Banks will not lend against that cash flow. This is why the grid remains unstable and why states are now trying to take over distribution — not because they have better solutions, but because the current model is failing.
NERC’s directive for refunds and consumer protection is necessary, but it does not solve the core issue: revenue. Until DisCos meter customers, bill accurately, and enforce payment, the ₦669.5 billion figure will keep climbing. The Electricity Act gave the sector freedom. 2025 showed that freedom without collection discipline is just a faster way to go bankrupt.
If Nigeria wants 24-hour power, it must first fix the business of collecting for the power it already has. Right now, DisCos are supplying ₦3.68 trillion of electricity and only getting paid for ₦2.32 trillion of it. That is not a power problem. That is a management problem.
