Federal Government Blasts DisCos Over Chronic Underperformance, Announces Plans for Restructuring, Stricter Enforcement, and ₦700bn Metering Initiative to Rescue Power Sector
The Federal Government has expressed deep frustration over the poor performance of electricity distribution companies (DisCos) in the Nigerian Electricity Supply Industry (NESI), describing their conduct as a major setback to efforts aimed at improving power supply nationwide.
Minister of Power, Chief Adebayo Adelabu, voiced the government’s concerns during a two-day retreat organized by the Senate Committee on Power. He accused the DisCos of frustrating reforms in the sector through chronic underinvestment in distribution infrastructure, which continues to undermine service delivery despite notable progress in generation and transmission.
In a statement issued by his Special Adviser on Strategic Communication and Media Relations, Bolaji Tunji, Adelabu highlighted glaring issues such as aging networks, widespread electricity theft, and poor capital injection, which have fueled overreliance on subsidies and left millions without reliable electricity.
“We need to get tough with the DisCos. They have disappointed us. Whatever progress we make in generation is meaningless if the distribution companies fail to deliver,” he said.
The Minister further revealed that many DisCos abandoned their technical partnerships shortly after taking over assets during the 2003 privatization process, opting instead to divert funds to repay acquisition loans rather than investing in infrastructure upgrades.
Despite a 70 percent increase in market liquidity from tariff adjustments with revenue rising from ₦1 trillion in 2023 to ₦1.7 trillion in 2024 distribution remains the sector’s weakest link. Adelabu noted that in Q4 2024, DisCos in the North remitted only ₦124.4 billion (30%) of their ₦408.86 billion invoice, while Southern DisCos remitted ₦254.6 billion (67%), largely driven by Lagos-based companies.
“These discrepancies reflect a deeper infrastructure crisis outside major economic hubs,” the Minister explained.
Addressing the metering gap, Adelabu noted that a ₦700 billion Presidential Metering Initiative and a World Bank-supported program aim to deploy 4.3 million meters by 2025. Already, 75,000 meters were rolled out in April 2024, with 200,000 more expected in May. “Closing the metering gap is key to fair billing and sustainability, but underinvestment and inefficiencies still hamper progress,” he said.
The Minister also warned of a growing ₦4 trillion subsidy backlog owed to generation companies ₦1.94 trillion of which is for 2024 alone with monthly shortfalls reaching ₦200 billion. He stressed that sustaining current tariff levels without financial reforms is no longer viable.
To rescue the power sector, Adelabu announced plans to restructure underperforming DisCos, enforce stricter performance benchmarks, and attract private investment into grid infrastructure. He also advocated regionalizing the transmission network to reduce system failures, citing the higher remittance rates from Lagos DisCos as proof of the benefits of better infrastructure.
Adelabu urged the National Assembly to enact stronger legislation to protect power assets from vandalism, emphasizing that tougher laws are essential for stabilizing Nigeria’s electricity supply and securing ongoing investments in the sector.
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