The Nigerian Electricity Regulatory Commission (NERC) has reported a decline in the revenue collection efficiency of Distribution Companies (DisCos) for the third quarter of 2024.
The efficiency rate decreased by 4.76 percentage points, dropping from 79.31% in Q2 to 74.55% in Q3.
This was contained in the Commission’s Q3 2024 report released on Friday.
This decline shows growing challenges in the nation’s electricity distribution sector, despite an increase in the total revenue collected.
In Q3, DisCos collected N466.69 billion out of the N626.02 billion billed to customers, compared to N431.16 billion collected from N543.64 billion billed in Q2, the report noted.
“The total revenue collected by all DisCos in 2024/Q3 was N466.69 billion out of the N626.02 billion that was billed to customers.
“This translates to a collection efficiency of 74.55%. In comparison, the total revenue collected by all DisCos in 2024/Q2 was N431.16 billion out of the N543.64 billion billed to customers which translated to a 79.31% collection efficiency. The 74.55% collection efficiency recorded in 2024/Q3 is -4.76pp lower than the collection efficiency recorded in 2024/Q2 (79.31%),” the report states.
Performance Highlights: Winners and Laggards
- Top Performers:
Eko DisCo emerged as the most efficient performer with a collection efficiency of 84.40%, followed closely by Ikeja DisCo at 83.78%. These companies’ consistent leadership reflects better operational strategies and consumer compliance in their regions.
- Lowest Performers:
Kaduna DisCo recorded the lowest collection efficiency at 46.42%, reflecting significant hurdles in revenue recovery. Jos DisCo followed closely with a substantial decline in efficiency.
- Improvements:
Only Ibadan DisCo (+6.59pp) and Enugu DisCo (+2.88pp) showed improvements in Q3 compared to Q2.
- Declines:
The remaining nine DisCos recorded drops in efficiency, with Kaduna (-14.20pp) and Jos (-12.09pp) experiencing the steepest declines.
- The data trends suggest that the recent decline in the revenue collection efficiency of Distribution Companies (DisCos) between Q2 and Q3 2024 may be partially attributed to an increase in energy offtake during the period.
“This is because it has been observed when there is a higher energy offtake, DisCos often allocate the incremental energy to areas where they record higher inefficiencies,” the report states.
What you should know
- On April 3, 2024, NERC raised the electricity tariff for customers enjoying 20 hours of power supply daily.
- Minister of Power, Adebayo Adelabu said Band A customers should cease payment of new electricity tariff if they do not enjoy supply for up to 20 hours daily.
- However, experts say the power sector still needs more investment especially to address the infrastructure deficit in the sector.
