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HomeExecutive BriefNigeria's electricity distributors growing revenue base

Nigeria’s electricity distributors growing revenue base

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Recently, the National Bureau of Statistics (NBS) released its Electricity sector report for the period 2015-2020.

The report details some of the wins recorded by the electricity sector between 2015 and 2020. Despite the improved revenue generation figures, our outlook for the industry remains somewhat bleak.

Focusing on revenue generation, the report highlighted that revenue to N536.1 million in 2020, from N278.8 million in 2015, a 92.2 per cent increase in the period under review.

Although signifying strong growth, the sector continues to struggle primarily due to the inability of discos to collect receipts despite various interventions, such as NERC’s Meter Asset Provider program (2018) (NMMP), which had limited effectiveness in closing the gap.

The program looked to relieve Discos of the responsibility to provide metres by using authorised third parties to provide, install, and maintain meter programmes to boost metered customers.

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The Central Bank of Nigeria (CBN) began its National Mass Metering Programme (NMMP) in November 2020 to fund local manufacturing and importation of meters by meter suppliers and Discos.

Despite various programmes. Despite multiple programmes, the latest data from the NERC estimates that the percentage of metered customers as of March 2022 was at 41 per cent, below half of the total customers.

Although the revenue base of discos has grown since 2015, the industry continues to be constrained by various bottlenecks, which will feed into the liquidity crisis.

Unless more efficient increased policies and programmes are unveiled to improve collections, we will continue to expect sub-optimal collections and a continued shortfall in receipts.

Reduced revenue collection will diminish the sector’s attractiveness to outside investments.

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