Despite ongoing consumer complaints regarding inadequate power supply and elevated tariffs, the 11 Discos reported a 46.96 percent increase in revenue compared to N604.15 billion during the same timeframe in 2023, from January to July.
This data comes as stakeholders in the sector have reduced their borrowings from commercial banks by N28.82 billion. An analysis from the Nigerian Electricity Regulatory Commission reveals that the distribution companies billed a total of N1.114 trillion during the review period but collected N887.86 billion, achieving a revenue collection efficiency of 79.7 percent.
In the previous year, the companies issued bills amounting to N797.18 billion and collected N604.15 billion. Following a two-year freeze on tariffs in the power sector, the Federal Government raised the rate for Band A customers in April from approximately N68 to N225 per kilowatt-hour, citing that these customers typically received 20 hours of supply daily.
However, in response to public backlash, NERC subsequently announced an 8.1 percent reduction, bringing the tariff down to N206.8 per kWh for Band A customers. The increase in electricity tariffs has significantly burdened many Nigerians with high energy costs.
Recently, Minister of Power Adebayo Adelabu assured citizens of a potential decrease in electricity prices in the upcoming months, as efforts to enhance power generation and distribution are underway.
Nevertheless, skepticism persists among Nigerians, particularly as numerous communities continue to request removal from the highest-paying tariff, which adversely affects their cost of living and stifles economic growth.
A detailed analysis of the monthly revenue indicates that N95 billion was earned in January from a total billing of N130.92 billion for that month. In February, N97 billion was collected against a projected N113 billion, while March saw N100.44 billion generated from N126.56 billion billed. April's revenue reached N142.92 billion out of N178.72 billion, and in May, N139.23 billion was generated from a billing of N191.65 billion.
In June, revenue rose to N150.86 billion from an estimated billing of N176.57 billion, and in July, N162.14 billion was collected from N197.11 billion. Comparing the January revenue of N95 billion with the N197.11 billion generated in July reveals a difference of N102.11 billion, representing an increase of 107.48 percent.
With the current revenue collection trends observed in the first seven months of 2024, the Distribution Companies (Discos) have already surpassed their total revenue for the entire year of 2020 and are on track to break records set in 2021, 2022, and 2023 by the end of 2024. Data from the National Bureau of Statistics reflects a steady increase in revenue, with figures of N526.8 billion in 2020, N761.2 billion in 2021, N828.1 billion in 2022, and N1.1 trillion in 2023.
Given this significant revenue growth, the Discos are anticipated to reinvest a portion into essential infrastructure development. Historically, these electricity distributors have faced criticism for insufficient investment in infrastructure, which is crucial for enhancing power supply to over 200 million Nigerians who largely rely on self-generated electricity for their homes and businesses rather than the national grid.
It is noteworthy that in May, the government secured a $500 million loan from the World Bank aimed at supporting electricity Distribution Companies. The Bureau of Public Enterprises has indicated that this loan will help address financing shortfalls in the distribution sector, which is regarded as the most challenging area within the industry.
Discos are anticipated to allocate the funds towards essential distribution infrastructure, enhance ATC&C loss management, improve the reliability of power supply, achieve financial sustainability within the power sector, and promote transparency and accountability. The BPE noted that substantial advancements have been made in the development of the DISREP Programme.
In the meantime, stakeholders in the power and energy sector have decreased their borrowing from commercial banks by N28.82 billion, a response to the rising costs of debt servicing driven by elevated interest rates. An analysis of the Central Bank's quarterly data revealed that the power sector's loans fell from N1.12 trillion in January 2024 to N1.08 trillion by June.