Nigeria’s electricity crisis is worsening, with power distribution companies recording losses of more than N2.4 trillion over the past two years, a development that has intensified blackouts and strained the entire electricity value chain.
Industry data covering 2024 and 2025 shows that the financial haemorrhage is being driven largely by billing inefficiencies, weak revenue collection and persistent cost-recovery challenges.
The impact is being felt across distribution companies (DisCos), generation companies (GenCos) and gas suppliers, ultimately leaving millions of households and businesses with unreliable supply.
Figures indicate that DisCos lost over N1 trillion in 2024, with losses rising sharply in 2025 to about N1.334 trillion, bringing the two-year total to roughly N2.349 trillion.
In 2025 alone, billing inefficiencies accounted for N649.87 billion, while poor revenue collection resulted in losses of N684.28 billion.
The mounting financial pressure has disrupted the delicate balance of the power ecosystem.
DisCos are increasingly unable to meet their payment obligations to GenCos, which in turn struggle to pay gas suppliers.
As a result, gas producers have cut supply, triggering a steady decline in electricity generation nationwide.
Available data suggests that average national power generation has fallen from around 4,600 megawatts in 2025 to below 3,500 megawatts in early 2026.
The drop has led to intensified load shedding, with widespread outages reported across many parts of the country.
For consumers, the consequences have been severe as many communities now receive less than 12 hours of electricity a day, while others get as little as three to six hours.
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In parts of Abuja, including Karu and Lokogoma, residents reportedly have barely three hours of power daily.
Communities in Delta State served by the Benin Electricity Distribution Company have also experienced prolonged outages lasting several days.
The wider sector remains burdened by debts estimated at over N6 trillion, with generation companies owed substantial sums.
Several power plants are operating well below capacity due to inadequate gas supply, further deepening electricity shortages.
The Chairman of the Electricity Consumers Association of Nigeria, Chijoke James, accused DisCos of exploitative billing practices, describing estimated billing as “the most exploitative system in the Nigerian power sector.”
For James, inflated bills were the main reason many customers resisted payment, arguing that “no one is willing to pay for electricity not supplied.”
He also alleged that some DisCo staff exploit the situation by extorting consumers under the threat of disconnection without remitting such payments to their companies.
Experts have pointed to Nigeria’s persistent metering gap as a core driver of inefficiency.
Power sector consultant and lawyer, Bode Fadipe, said billing disputes were inevitable where customers lacked meters.
According to Fadipe, once electricity is accurately measured at every point in the value chain, it can be properly billed, making comprehensive metering the most viable long-term solution.
The depth of the crisis has also been exposed by developments within government.
According to reports, the Presidential Villa is planning to exit the national grid following the completion of a N17 billion solar mini-grid project designed to guarantee uninterrupted power supply.
Reacting to the development, the Acting Managing Director of the Abuja Electricity Distribution Company, Engr Chijoke Okwuokenye, said the decision reflected long-standing doubts about supply reliability.
Okwuokenye argued that with modest additional investment in storage and network upgrades, the Villa could have been guaranteed uninterrupted grid power, sending a stronger signal of confidence in the sector.
He added that advances in technology now make it possible to provide reliable hybrid power solutions at costs far lower than diesel generation, stressing that the continued reliance on generators by many government agencies suggested “a different interest at stake.”