The Nigerian Electricity Regulatory Commission (NERC) has revealed that electricity distribution companies (DisCos) collectively remitted a total of N1.18 trillion in 2024.
This remittance figure represents the gross sum with an outstanding deficit of N185 billion, translating to an overall remittance performance of 86.47%.
This is contained in the newly released 2024 NERC’s Annual Report.
According to NERC, “DisCos remitted a gross sum of N1,184.88 billion, leaving a total deficit of N185.47 billion. This translates to an overall remittance performance of 86.47%
“Eko, Ikeja and Abuja DisCos had the highest remittance performances with 99.33%, 94.43% and 90.42% respectively to NBET in 2024, while Kaduna achieved the lowest remittance performance to NBET (32.77%).”
NERC noted that the “highest remittance performances to the MO were recorded by Yola, Ikeja, Eko and Abuja at 96.73%, 95.71%, 93.12% and 92.97% respectively, while Kaduna recorded the lowest MO remittance performance of 26.29%.”
The electricity sector continues to suffer from liquidity challenges
The NERC noted the persistent liquidity crisis affecting the electricity sector, attributing it largely to the inability of DisCos to meet their full remittance obligations.
According to NERC, the sector continues to struggle financially, with the federal government still bearing the burden of subsidies in 2024 due to the DisCos’ failure to remit 100% of their market invoices.
The NERC stated, “It is clear that the upstream segment of the market continues to be plagued by liquidity challenges. Under the payment assurance waterfall regime, DisCos’ inability to achieve 100% remittance to the upstream segment indicates that they were unable to earn significant portions of their allowed revenues. Without this, they would also be unable to undertake necessary operational/capital investments.”
The NERC noted that Ajaokuta Steel Co. Ltd and the host community did not make any payment for the N5.19 billion and N44 million energy invoices and service charges received from NBET and MO, respectively, in 2024.
According to the report, “The Commission has escalated the issue of continual non-payment of electricity bills by Ajaokuta to the relevant federal ministries to find a lasting solution. Failure to settle the obligations may put the Ajaokuta complex at risk of being disconnected from its service providers (NBET and MO) on the grounds of gross indebtedness.”
What you should know
In February 2024, the Federal Government declared that Nigeria can no longer continue to subsidize electricity as the country must begin to move towards a cost-effective tariff model.
This is as it is stated that the country is currently indebted to the tune of N1.3 trillion to generating companies (GenCos), while the gas companies are being owed $1.3 billion.
- According to the Minister of Power, Adebayo Adelabu, only N450 billion was budgeted for electricity subsidy in the 2024 budget.
- Despite several government interventions, Nigeria’s power sector continues to grapple with significant challenges, primarily due to underinvestment and persistent liquidity shortages.
- This ongoing debt repayment is part of a broader government strategy aimed at improving liquidity in the sector and, ultimately, boosting the country’s power supply.
The sustained challenges in achieving optimal collection rates, managing remittances, and reducing losses highlight broader issues facing Nigeria’s power distribution sector.
But ate there reciprocal value percentages in terms of service delivery to customers? Added to huge government subsidies, the very high tariffs being paid by users should guarantee their enjoyment of seamless and unbroken electricity supply.
But ate there reciprocal value percentages in terms of service delivery to customers? Added to huge government subsidies, the very high tariffs being paid by users should guarantee their enjoyment of seamless and unbroken electricity supply.