The crisis in Nigeria's power sector is deepening, with electricity distribution companies (DisCos) racking up over ₦2.4 trillion in losses in the last two years, leading to extended blackouts and putting immense pressure on the entire energy framework.
According to industry data and regulatory reports, losses recorded over 2024 and 2025 are primarily due to inefficiencies in billing systems, ineffective revenue collection, and challenges in recovering costs. This ongoing crisis permeates the electricity value chain, affecting distribution firms, generation companies (GenCos), and gas suppliers, with millions of consumers feeling the consequences.
In 2024 alone, DisCos faced losses that surpassed ₦1 trillion, escalating to approximately ₦1.334 trillion in 2025. The billing inefficiencies contributed ₦649.87 billion to the total losses, while poor revenue collection accounted for ₦684.28 billion in losses that same year.
This financial turmoil threatens the stability of the power ecosystem; as DisCos are increasingly unable to fulfill financial commitments to GenCos, which then struggle to settle their bills with gas suppliers. Such a chain reaction has prompted gas producers to reduce supply, further exacerbating the decline in electricity generation.
Recent statistics reveal that national power generation plummeted from about 4,600 megawatts in 2025 to below 3,500 megawatts at the beginning of 2026. Consequently, the issue of load shedding has intensified, leading to reports of widespread outages across various regions.
For households and businesses, the repercussions are dire. Many locations now receive only a fraction of daily power needs, with some areas faced with less than 12 hours of electricity each day, while others struggle with just three to six hours. In certain neighborhoods of Abuja, such as Karu and Lokogoma, residents reportedly have access to power for barely three hours daily, contrasting starkly with communities served by the Benin Electricity Distribution Company (BEDC) in Delta State, which endure outages lasting several days.
The overall sector is also encumbered by over ₦6 trillion in debts, with generation companies awaiting substantial payments. Numerous power plants are operating below their intended capacity due to insufficient gas deliveries, further deepening the electricity crisis.
As pressure mounts, criticism is growing from consumers and industry players. Chijoke James, chairman of the Electricity Consumers Association of Nigeria, has condemned DisCos for exploitative billing methods. He expressed that persistent sharp practices at the distribution level over the years has made estimated billing one of the most offensive practices in Nigeria's power sector.
“The exorbitant bills issued to consumers are a primary reason behind the reluctance to make payments. People are unwilling to pay for electricity that has not been supplied,” he commented. He also noted that some personnel from DisCos exploit the situation by extorting customers under threat of service disconnection without properly reporting such payments.
Experts have pointed to the lack of proper metering as a significant factor contributing to these inefficiencies. Bode Fadipe, a consultant in the power sector, emphasized the necessity for precise measurement in billing systems. “Without a meter, any billing format becomes speculative and fundamentally erroneous. If the data collected is flawed, the resulting outputs will also be inaccurate. This is why billing disputes are common.”
He advocated for thorough metering throughout the electrical supply chain, stating, “Electricity measurement can happen at numerous stages. Accurate metering allows for precise billing. The key solution lies in comprehensive metering.”
Meanwhile, the crisis has prompted significant actions from the government. Reports indicate that the Presidential Villa in Abuja intends to disengage from the national power grid following the establishment of a ₦17 billion solar mini-grid project designed to guarantee a steady power supply.
In light of these developments, Engr Chijoke Okwuokenye, the acting managing director of the Abuja Electricity Distribution Company (AEDC), observed, “It appears a decision was made some time ago to rely on generators for the state house to avoid the inconvenience of power interruptions, a strategy that has persisted for years.
“It is concerning that with slightly increased investments in storage and network upgrades, uninterrupted power supply could have been readily achievable, which would project a better image and show support for the sector.” He also indicated that advancements in technology make it feasible to provide reliable and steady power with costs lower than diesel generation.
As the crisis deepens, stakeholders are calling for urgent governmental action, stressing that without decisive reforms, Nigeria’s power sector is threatened with further destabilization and prolonged nationwide power outages.
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