A common thought when thinking about the Nigerian electricity sector is all its challenges and inefficiencies. Among the many challenges, collection losses from the Distribution Companies (DisCos) seem to be the most pressing. There are, however, a few exceptions where effort breeds result.
Electricity customers in Nigeria can give a bunch of reasons why they are unwilling to pay bills. But, from the many options to pick from, unreliable service delivery is probably the most important.
According to the Multi-Year Tariff Order (MYTO), minor tariff reviews are carried out every six months. However, to improve cash collection in the sector, the regulator, Nigeria Electricity Regulatory Commission (NERC), thought it best to increase tariffs to reflect service delivery and DisCo collection rate properly.
Despite this action, it became obvious that increasing tariffs is not the solution to solving the sector’s bottlenecks. The reason is that the service delivery does not match tariffs as it was intended. Customers have, however, admitted that if service delivery can be equal to tariffs, they would be willing to pay for electricity.
Indeed, effort breeds result because if the Distribution Companies (DisCos) improved service delivery to their customers, the collection rate would improve.
In the just-concluded customer engagement programme by Nextier Power and the MacArthur Foundation in Bauchi state, electricity customers praised their DisCo. Jos Electricity Distribution Plc gave estimated bills that matched service delivery for unmetered customers according to customers in the state.
Metered customers also gave testament to how good service delivery was in the state. For this reason, customers had the willingness to pay their electricity bills. The implication is that collection efficiency in the DisCo’s franchise areas would be higher than in other DisCos.
If all the DisCos can improve service delivery in their respective franchise areas, collection efficiency would increase. An increase in collection efficiency would be a huge step in solving the sector’s challenges because, as is seen in the case of JED Plc, effort breeds result, and soon inefficiency may be a thing of the past in the sector.