Nigerians are facing a frustrating paradox. The country continues to grapple with persistent nationwide blackouts, yet electricity distribution companies (DisCos) raked in a staggering N1.1 trillion ($2.6 billion) in revenue in 2023, a new report reveals. This figure represents a significant increase of N234.4 billion or 28.2% compared to earnings in 2022.
The report, released by the National Bureau of Statistics (NBS) on Monday, exposes a growing disconnect between the financial performance of DisCos and the reality of power supply in Nigeria. While DisCos celebrate increased revenue, Nigerians struggle with epileptic electricity, significantly hindering businesses and households. This lack of reliable power supply stifles economic activity and disrupts daily life for millions.
Exploiting Estimated Billing System and Loopholes
Analysts suggest this financial boon for DisCos is partly attributed to an increase in customers under the estimated billing system. This system, prone to inaccuracies, allows DisCos to bill customers without meters based on estimates. This lack of metering opens the door for potential overbilling, raising concerns about fairness and transparency in billing practices.
The NBS report acknowledges a slight decrease (1.73%) in the number of customers on estimated billing. However, this decrease is overshadowed by a significant 9.38% increase in metered customers. While this indicates some progress towards a more transparent billing system, the pace of change remains sluggish. Consumer rights groups argue that a faster rollout of meters is essential to ensure accurate billing and protect consumers from exploitation.
Regulator Fines DisCos for Overbilling, But Enforcement Concerns Linger
The Nigerian Electricity Regulatory Commission (NERC) has taken action against DisCos for overbilling customers. In February 2024, NERC announced sanctions, including a N10.5 billion penalty to be deducted from DisCos’ annual revenue. This penalty serves as a consequence for non-compliance with capping regulations for estimated bills. However, some Nigerians remain skeptical about the effectiveness of these fines. They argue that stronger enforcement mechanisms are needed to deter DisCos from future overbilling practices.
Consumers Demand Accountability and Transparency
Nigerians are expressing frustration with the current situation. Consumer rights groups like the National Electricity Consumer Advocacy Network (NECAN) are calling for stricter enforcement measures against DisCos that fail to meter their customers. They argue that widespread metering would curb overbilling and ensure a fairer system. NECAN secretary, Uket Obonga, emphasizes, “They are making money and smiling, but they have not expanded their network to meet the demands of customers.” Obonga highlights the questionable policies that benefit DisCos at the expense of consumers, urging for a more balanced approach.
A Flicker of Hope: Government Pledges Improvement
The Nigerian government has acknowledged the challenges and is exploring solutions. The Minister of Power, Adebayo Adelabu, has assured Nigerians that the current difficulties caused by gas shortages and debts owed to gas producers will be resolved within the next few months. The government has also threatened to revoke the licenses of DisCos if the situation does not improve.
However, Nigerians have heard similar promises before. Many remain cautious, waiting to see concrete steps taken to address the systemic issues plaguing the power sector.
Source: Punch
