ABIODUN OMOTOLA, in this analysis, looks at the earnings of Nigeria’s DisCos amid epileptic power supply and consumers’ dissatisfaction
The 11 Electricity Distribution Companies in Nigeria generated N542.7bn from bills in 2020 – a N273.4bn shortfall compared to the N816.2bn made in 2019. This is according to the Nigerian Electricity Supply Industry report for 2019 and 2020 as published by Nigerian Electricity Regulatory Commission.
A cursory analysis of the report revealed that the DisCos collected the highest payment in November and December 2020 with N93.1bn and N96.1bn respectively.
This might be attributed to the reported hike in electricity tariff from N30.23 per kilowatt to as much as N62.33. It could also be partly attributed to the increased usage of electrical appliances during the Christmas and New Year festivities.
In the period under review, Ikeja Electricity Distribution Company raked the highest bill with N105.2bn in 2020, representing 19.4 per cent of the total collection. The company, however, got 21.1 per cent of its N133.3bn target. This is largely due to its large capacity, as it serves major areas in the country’s economic capital; little wonder it boasts of being the largest power distribution company in the country.
The company began its new phase in November 2013 following the handover of the defunct Power Holding Company of Nigeria to NEDC/KEPCO Consortium under the privatisation scheme of the Federal Government.
Trailing IE is Eko Electricity Distribution Company, which collected N84.7bn, accounting for 15.6 per cent of the total collections. It however, fell short of its N107.7bn target.
It is worth noting that IE and EKEDC serve Lagos State alone, compared to other DisCos that have a number of states under their jurisdiction.
Abuja Electricity Distribution Company collected N82.6bn (15.2 per cent). According to information from the firm’s website, AEDC, which was privatised in November 2013, is owned by KANN Utility Limited and the Federal Government of Nigeria, at 60 per cent and 40 per cent equity respectively.
The breakdown of revenue generated by the other DisCos is as follows; Ibadan (N61.8bn), Enugu (N47.8bn), Benin (N45.7bn), Kano (N33.8bn), Port Harcourt (N31.4bn), Kaduna (N21.5bn), Jos (N17.4bn), and Yola (N10.7bn).
Reason for shortfall
Earlier in the year, Nigerian Electricity Regulatory Commission stated in its NESI key financial and operation report that 62.63 per cent of electricity customers in the country were under the estimated billing package as of Q3 2020, blaming it for the shortfall. It also reported that metering of customers across the country had been a major challenge, as only EKEDC and IE had metered over 50 per cent of their customers.
However, other states are keying into the mass metering initiative, as the Central Bank of Nigeria intensifies effort to ensure adequate metering for Nigerians.
The CBN Governor, Godwin Emefiele, in his MPC briefing, stated that N33.45bn of the N59.2bn earmarked for the National Mass Metering Project had been disbursed to nine DisCos for the procurement of 605,852 meters, while N89.89bn had been disbursed under the Nigeria Electricity Market Stabilisation Facility to 11 DisCos to improve electricity supply.
Nigerians will hope to receive value for their money. Despite the increase in tariff, most consumers are still disgruntled about the lack of adequate power supply, which weighing heavily on most start-ups in the country. A major concern also is the issue of estimated billing, which has caused many consumers displeasure in recent years.
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