Nigeria’s electricity sector recorded a revenue shortfall of about N1.36tn in 2025, as power distribution companies failed to bill consumers for electricity worth N694.8bn and also failed to collect a further N669.5bn from bills already issued, according to the Nigerian Electricity Regulatory Commission.
This is according to NERC’s 2025 Annual Report, which showed that the 11 DisCos supplied electricity valued at N3.68tn during the year but billed customers for only N2.99tn a gross billing efficiency of 81.14 per cent.
This means electricity worth about N694.8bn supplied to consumers went unbilled. Of the N2.99tn that was billed, the report noted that the DisCos collected only N2.32tn, leaving N669.49bn outstanding. Combined, the billing and collection gap came to about N1.36tn.
NERC stated, “The total billing to electricity consumers by the DisCos was N2.99tn, but only N2.32tn was collected, translating to a collection efficiency of 77.60 per cent.”
The commission also reported that DisCos received 31,251.77 gigawatt-hours of electricity at their trading points but billed customers for only 25,867.86GWh, putting energy accounting efficiency at 82.77 per cent. Ibadan DisCo posted the highest energy accounting efficiency at 88.84 per cent, while Enugu recorded the lowest at 72.18 per cent.
The commercial losses in the power sector have drawn criticism from former senator and businessman Ben Murray-Bruce, who argued that the country’s electricity privatisation had failed to deliver the investment and reliability Nigerians were promised.
In an open letter to President Bola Tinubu, Murray-Bruce said the country needed to stop pretending the existing electricity model was working. “The 2013 privatisation was not a reform. It was a transfer of custody,” he wrote.
He argued that the core problem was that investors had acquired electricity assets without the financial capacity needed to rebuild and expand them.
“The men and women who bought the GenCos and the DisCos had enough money to purchase the assets. They did not have enough money to run them. Owning a power station and capitalising a power station are two different economic acts, and we confused them,” he said.
His comments come against the backdrop of NERC’s findings that the weighted average aggregate technical, commercial and collection loss across the DisCos stood at 37.03 per cent in 2025.
That figure comprised 18.86 per cent technical and commercial losses and 22.40 per cent collection losses, and was 16.49 percentage points above the 20.54 per cent target set under the 2025 Multi-Year Tariff Order.
Murray-Bruce said the financial weakness of the distribution companies was particularly troubling given that they remained responsible for collecting electricity revenue from consumers.
He decried the fact that millions of active electricity customers remained unmetered, which he said had allowed estimated billing to persist.
“A meter is a machine that tells the truth. An estimated bill is a machine that does not. An industry that cannot generate power has discovered it can still generate revenue by billing darkness,” he stated.
NERC’s latest annual report put the number of active registered customers at 12.16 million as of December 2025, with 6.97 million, or 57.27 per cent, metered leaving 5.20 million customers, or 42.73 per cent, unmetered.
The regulator said DisCos installed 972,040 meters during 2025, with Ibadan accounting for the highest number at 180,256 and Yola the lowest at 14,231.
Beyond the distribution companies, Murray-Bruce said the generation companies also had legitimate grievances over unpaid obligations, but argued that every player in the electricity market needed to accept responsibility for its failures.
“To the GenCos: you are owed. That is true, and I will not pretend otherwise. But you contracted into a market you knew was insolvent, and you have spent a decade lobbying for tariffs and bailouts rather than capital. You cannot be a private company on the day the tariff rises and a public charity on the day the invoice falls due,” he wrote.
The NERC report also points to a significant liquidity problem in the market. It said the Nigerian Bulk Electricity Trading Company and the market operator issued gross invoices of N1.72tn to the DisCos in 2025 for energy costs and administrative services, but the DisCos remitted only N1.632tn, leaving a market shortfall of N89.58bn.
The government, meanwhile, remained a major financier of the electricity market through tariff subsidies. NERC said the Federal Government incurred a subsidy obligation of N1.93tn in 2025, equivalent to 57.44 per cent of the total N3.357tn NBET invoice for the year.
The regulator said the subsidy was “largely attributable to the FGN’s policy to freeze allowed tariffs paid by customers despite the increase in cost-reflective tariffs.”
Murray-Bruce, however, insisted that the government’s spending had failed to translate into reliable electricity, pointing to the enormous public cost of keeping the sector afloat. “Roughly N10tn of public money has gone into this sector in 13 years, and the lights are still off,” he said.
He also challenged the Federal Government to rethink the structure of the electricity market rather than persist with a centrally driven model. “Every village, every estate, every community in Nigeria should have its own PHCN,” he proposed.
Under his proposal, communities and estates would develop their own metered solar generation, with state governments providing guarantees for financing and residents paying regulated tariffs.
He suggested state governments take responsibility for powering streetlights, police stations, primary healthcare centres and schools, while the Federal Government focuses on federal institutions and infrastructure.
The commission recorded two grid collapse incidents during the year — one full and one partial. The full collapse occurred on September 10, 2025, while the partial collapse on December 29 was linked to the failure of a circuit breaker on the Benin-Onitsha 330kV line’s one circuit at the Benin transmission station.
Murray-Bruce also urged Nigerians to hold state governments accountable for electricity responsibilities devolved under the new legal framework. “Stop blaming the president for the darkness in your street. Since 2023, electricity has been a concurrent responsibility,” he wrote.
The NERC figures show that the electricity sector’s financial troubles go beyond the N1.36tn gap between electricity supplied, billed and collected.
The combination of poor billing, weak collections, high technical and commercial losses, incomplete metering, market under-remittances and the government’s huge tariff subsidy obligation points to a sector struggling to convert the electricity it supplies into sufficient revenue to sustain the entire value chain.
For consumers, the problem is compounded by the fact that more than four in every 10 active customers remained unmetered at the end of 2025, while DisCos collectively failed to bill for nearly one-fifth of the electricity supplied to them.
