- The Federal Government queries the poor financial performance of DisCos amid mounting debts and a liquidity crisis.
- NISO urged the adoption of cost-reflective tariffs to boost financial sustainability and protect consumers.
The Federal Government has raised concerns over the ongoing financial crisis facing Nigeria’s power distribution companies (DisCos). Despite years of reforms and interventions, the sector continues to struggle with liquidity shortfalls, poor investment, and an unreliable power supply.
At the 5th Power Correspondents Association of Nigeria (PCAN) Conference in Abuja, Abdu Mohammed, Managing Director of the Nigeria Independent System Operator (NISO), attributed the problems to inadequate funding, weak infrastructure, and unrealistic tariffs. He explained that although the tariff framework takes into account inflation and exchange rates, political and social pressures keep electricity prices below sustainable levels.
Mohammed warned that without cost-reflective tariffs, the industry would remain financially unstable. He said millions of Nigerians still face energy poverty. Many either lack access to reliable electricity or cannot afford it. “The question,” he said, “is not whether cost-reflective tariffs are needed, but how to introduce them while protecting vulnerable citizens.”
PCAN Chairman, Obas Esiedesa, described the sector’s rising debt, now above ₦6 trillion, as a serious threat to its future. He added that gas shortages, weak transmission systems, and unstable exchange rates worsen the situation.
According to World Bank data, about 85 million Nigerians, roughly 43% of the population, still lack access to grid electricity. This makes Nigeria the country with the world’s most enormous electricity access gap.
In summary, stakeholders agreed that solving the DisCos’ cash crisis requires tariff reform, regulatory transparency, and targeted government support. They emphasised that a financially stable and transparent power sector is crucial for ensuring reliable electricity, fostering investment growth, and promoting long-term economic development.