By Benson Daniel
Nigeria’s electricity distribution companies (Discos) recorded a decline in revenue recovery performance in May despite collecting ₦208.15 billion from electricity consumers, reflecting persistent challenges in the country’s power distribution sector.
Industry data showed that while total collections remained substantial, the percentage of revenue recovered from customers fell compared with the previous month, highlighting ongoing issues related to energy losses, customer indebtedness, electricity theft and inadequate metering.
The revenue recovery rate is a key performance indicator used to measure the proportion of billed electricity payments successfully collected by distribution companies. Analysts say weaker recovery rates continue to affect the financial sustainability of the power value chain.
Despite improvements in billing systems and digital payment platforms, many Discos continue to struggle with low collection efficiency, particularly in areas with high rates of estimated billing, meter bypass and unpaid electricity bills.
Power sector experts noted that inadequate investment in network infrastructure, aging distribution facilities and widespread energy losses have continued to limit the operational and financial performance of electricity distribution companies.
They stressed that improved metering under the Federal Government’s Meter Asset Programme, stricter enforcement against electricity theft and greater customer engagement would be critical to boosting collection efficiency and reducing commercial losses.
Industry stakeholders also called for continued reforms to strengthen the liquidity of the electricity market, warning that poor revenue recovery affects the ability of Discos to meet their payment obligations to power generation companies and other operators in the electricity value chain.
According to analysts, improving revenue collection remains essential for attracting new investment into Nigeria’s power sector, enhancing service delivery and ensuring a more reliable electricity supply for households and businesses.
The decline in May’s recovery rate underscores the financial pressures facing electricity distributors as they seek to balance rising operational costs with the need to improve customer satisfaction and expand access to prepaid metering.
Experts maintain that sustained regulatory reforms, improved operational efficiency and stronger collaboration among market participants will be necessary to place Nigeria’s electricity distribution industry on a more sustainable financial footing.
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