Nigeria’s electricity distribution companies, known as DisCos, failed to collect ₦669.5 billion in billed charges during 2025, according to the latest data from the Nigerian Electricity Regulatory Commission. The unpaid amount represents a 24.7% increase from the previous year’s shortfall of ₦536.95 billion.

Customers were billed ₦2.99 trillion for electricity in 2025, but DisCos recovered only ₦2.32 trillion. This resulted in a collection efficiency of 77.6%. The gap has widened despite efforts to improve billing accuracy and payment compliance.

Unbilled electricity adds to revenue losses

The sector’s financial challenges extend beyond unpaid bills. The commission reported that DisCos received electricity worth ₦3.68 trillion but invoiced customers for only ₦2.99 trillion. The ₦694.8 billion difference reflects energy that passed through the system without being billed.

These two gaps—unbilled energy and uncollected payments—create a dual financial burden. One issue involves electricity that reaches DisCos but never generates revenue. The other stems from bills that are issued but remain unpaid. Both reduce the funds available for maintaining and expanding the distribution network.

The commission stated that these inefficiencies continue to strain the market’s financial health, making it harder to attract investment. Distribution companies play a central role in the electricity value chain, linking power suppliers to consumers. When revenue falls short, their ability to meet obligations and upgrade infrastructure declines.

Market remittances fall short of obligations

In 2025, DisCos faced another financial demand. The Nigerian Bulk Electricity Trading Plc and the Market Operator issued invoices totaling ₦1.72 trillion for energy costs and administrative services. The companies remitted ₦1.63 trillion, covering 94.8% of the total. The remaining ₦89.58 billion was classified as an underpayment.

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The shortfall demonstrates how liquidity problems spread across the sector. When distribution companies struggle to collect payments from consumers, their ability to settle invoices from power generators and system operators also weakens.

This pattern has appeared in previous years, though the 2025 shortfall ranks among the largest recorded. The trend indicates that structural issues, rather than temporary disruptions, are driving the revenue gaps.

Metering has been proposed as a way to improve billing accuracy. In October 2025, the Federal Government allocated ₦28 billion under the Meter Acquisition Fund Tranche B scheme to procure and install prepaid meters. The initiative aims to reduce disputes over estimated bills and ensure customers pay only for the power they use.

However, metering alone cannot solve the collection problem. Even with accurate bills, consumers may still fail to pay. Technical losses during transmission and distribution also reduce revenue. Without addressing these issues, the sector’s financial stability will remain at risk.

Broader impact on housing and infrastructure

The revenue shortfall affects more than just the power sector. A financially stable electricity market could invest more in transformers, substations, and distribution lines, improving reliability. This matters for Nigeria’s property and construction industries.

Developers now consider electricity availability when planning projects. Unreliable power forces them to budget for private generators, diesel, and backup systems, increasing costs. These expenses often lead to higher service charges for residents, making housing less affordable.

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In some areas, power reliability influences where developers build. Locations with better infrastructure attract more investment, while others are neglected. A stronger distribution network could help balance development and reduce disparities in access to basic services.

The Electricity Act 2023, which replaced the older Electric Power Sector Reform Act, seeks to address some of these challenges. By removing electricity from the Exclusive Legislative List, the law allows states and private entities to participate more directly in generation, transmission, and distribution. The changes aim to encourage competition and draw investment.

Still, the latest figures show that financial sustainability remains a major obstacle. Without better revenue collection, the sector may struggle to secure the capital needed for expansion, even with regulatory reforms.

The ₦669.5 billion collection gap highlights the scale of the problem. Until billing accuracy, payment discipline, and infrastructure losses improve, the cycle of underinvestment and unreliable supply will likely persist.

For homeowners already facing financial strain, rising foreclosure rates add another layer of difficulty, making access to stable electricity even more critical.