In the first seven months of 2024, Nigeria’s electricity distribution companies have generated a total revenue of N887.86bn. This increase is attributed to a rise in tariffs for Band A customers and improved revenue collection. Despite consumer complaints about poor power supply and high tariffs, the 11 Discos saw a 46.96% increase in income compared to the same period in 2023, reaching N604.15bn.
Stakeholders in the sector have reduced their borrowings from commercial banks by N28.82bn. Data from the Nigerian Electricity Regulatory Commission reveals that the distribution companies billed N1.114tn during this period but collected N887.86bn, achieving a revenue collection efficiency of 79.7%.
Following a tariff freeze, the Federal Government raised the electricity tariff for Band A customers from about N68 to N225 per kilowatt-hour in April. Despite public outcry, the Nigerian Electricity Regulatory Commission later reduced the rate to N206.8/kWh. This increase in tariffs has led to higher energy bills for many Nigerians.
The Minister of Power has hinted at a possible reduction in electricity prices in the future as efforts are made to improve power generation and distribution. However, skepticism remains among Nigerians, especially those in high-paying tariff areas which impact living costs and hinder economic growth.
The revenue breakdown for the months from January to July shows a steady increase in generated income, with the Discos exceeding their revenue for the whole of 2020. The companies are expected to reinvest part of this revenue into much-needed infrastructure development.
The government recently secured a $500m loan from the World Bank to support electricity Distribution Companies in addressing financing gaps in the distribution segment. The loan is aimed at improving infrastructure, reducing losses, enhancing power supply reliability, achieving financial sustainability, and promoting transparency and accountability in the power sector.
Meanwhile, there has been a decrease in borrowing from commercial banks within the power and energy sector due to high interest rates. Central Bank statistics show a reduction in loans from N1.12tn in January 2024 to N1.08tn in June.