- The federal government spent N633.30 billion on electricity subsidies in Q1 2024, up 150.56% from the previous quarter.
- DisCos improved their collection efficiency to 79.11% in Q1 2024, compared to 73.79% in the last quarter.
The federal government accumulated N633.30 billion in electricity subsidies in the first quarter of 2024, despite the 11 electricity Distribution Companies (DisCos) receiving N291.6 billion from the N368.6 billion billed to customers.
This subsidy was accrued before the government’s April increase in electricity prices for Band A customers. The figure is detailed in the Q1 2024 report from the Nigerian Electricity Regulatory Commission (NERC). The report states that the subsidy amounted to 90.57% of the total NBET invoice for Q1 2024, with the government paying an average of N211.10 billion.
This represents a 150.56% increase (N380.56 billion) compared to the N252.7 billion incurred in Q4 2023. The report attributes this rise primarily to the government’s policy of harmonizing exchange rates and maintaining end-user customer tariffs at the December 2022 rates.
The report also reveals that total revenue collected by all DisCos was N291.62 billion out of the N368.65 billion billed to customers, resulting in a collection efficiency of 79.11%. This compares to a collection efficiency of 73.79% in Q4 2023, where DisCos collected N294.95 billion out of the N399.6 billion billed.
Notably, Ikeja and Eko DisCos achieved the highest collection efficiencies at 103.61% and 86.24%, respectively, while Yola DisCo recorded the lowest at 43.03%. The report indicates that 10 DisCos improved their collection efficiency in Q1 2024 compared to Q4 2023, with one DisCo showing a significant increase of +13.99 percentage points. Only Ibadan DisCo saw a decline of -0.70 percentage points in collection efficiency.
Furthermore, none of the four international bilateral customers serviced by the market operator made payments against their $14.19 million invoice. Similarly, bilateral customers within the country failed to pay a cumulative invoice of N1.8 billion.