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 dropped by 4.76 percentage points, from 79.31% in Q2 to 74.55% in Q3.
This was revealed in the Commission’s Q3 2024 report, released over the weekend.
The decline highlights growing challenges within 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 Q3 2024 was N466.69 billion out of the N626.02 billion billed to customers. This translates to a collection efficiency of 74.55%. In comparison, the total revenue collected by all DisCos in Q2 2024 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 Q3 2024 is 4.76 percentage points lower than the 79.31% recorded in Q2,” the report states.
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.
On the other hand, Kaduna DisCo recorded the lowest collection efficiency at 46.42%, highlighting significant challenges in revenue recovery. Jos DisCo also saw a substantial decline in efficiency.
Only Ibadan DisCo (+6.59 percentage points) and Enugu DisCo (+2.88 percentage points) showed improvements in Q3 compared to Q2.
The remaining nine DisCos reported drops in efficiency, with Kaduna (-14.20 percentage points) and Jos (-12.09 percentage points) experiencing the steepest declines.
The report suggests that the recent decline in the revenue collection efficiency of DisCos between Q2 and Q3 2024 may be partly attributed to an increase in energy offtake during the period.
“This is because it has been observed that when there is a higher energy offtake, DisCos often allocate the additional energy to areas where they experience higher inefficiencies,” the report states.
On April 3, 2024, NERC raised the electricity tariff for customers receiving 20 hours of power supply daily.
Minister of Power, Adebayo Adelabu, stated that Band A customers should cease payment of the new electricity tariff if they do not receive supply for up to 20 hours daily.
However, experts suggest that the power sector still requires more investment, particularly to address the infrastructure deficit in the sector.