The investigation into Nigeria’s troubled power sector has taken a decisive turn, with the House of Representatives Ad hoc Committee laying the blame for the nation’s persistent electricity woes squarely at the feet of the electricity distribution companies (DisCos). The committee, which is probing reforms and expenditure from 2007 to 2024, accused the DisCos of systematically crippling the power supply system through years of poor investment, inadequate infrastructure expansion, and a failure to honor the obligations set out in their original business plans.
During a public hearing on Wednesday, Committee Chairman Hon. Ibrahim Almustapha Aliyu did not mince words. He expressed shock that despite the Transmission Company of Nigeria (TCN) having the capacity to wheel up to 8,000 megawatts of electricity, the DisCos consistently refuse to take more than about 4,000 megawatts. Aliyu described this bottleneck as a problem entirely of the DisCos’ own making.
“You have caused this problem because you could not expand from what you inherited,” he told the representatives of the distribution firms.
Aliyu stated that most DisCos had misled the government at the point of acquisition, presenting impressive business plans but failing to deploy the necessary resources to upgrade substations, transformers, and distribution networks over a decade after privatization.
He elaborated that the power distribution firms have “Refused to invest, refused to expand and refused franchising options,” thereby creating an environment ripe for meter bypassing, energy theft, and consumer apathy across the country.
The Committee Chairman argued that if the DisCos had made the required investments in up-to-date transformers and proper network expansion over the past 13 to 14 years, the current problems would not exist. “You would uptake more energy, the cost would be lower, and Nigerians would be happy,” he said.
He connected the DisCos’ failure directly to consumer behavior, noting that many people resort to illegal connections simply because they are billed hefty monthly sums for electricity that is either nonexistent or grossly inadequate.
“How do you expect someone whose monthly bill equals his salary to keep paying? People will look for alternatives,” Aliyu challenged. “And your refusal to invest has contributed to this unholy attitude of bypassing and stealing energy.”
Aliyu reminded the DisCos that citizens, in some areas, actually enjoyed better supply under the defunct NEPA/NITEL system and expected significant, tangible improvements after private investors took over the assets. He challenged them to reconcile their original claims of financial capacity and technical competence with their current inability to meet service delivery benchmarks, network expansion goals, and tariff obligations.
DisCos Blame Subsidy Delays for Weak Investment
In their defense, the distribution companies pointed to the government’s subsidy structure as a major drain on their capacity for capital investment. Dr. Mahmood Abubakar, Chief Regulatory and Compliance Officer for Kaduna Electric, explained that nearly 60 percent of electricity supplied nationwide is subsidized. This situation, he argued, continues to weaken investor confidence and limits the DisCos’ ability to make the crucial upgrades required.
According to Abubakar, only about 40 percent of the energy consumed, largely by Band A customers, pays a cost-reflective tariff. The remaining 60 percent relies heavily on government subsidies, which are often delayed or simply unpaid.
“If we go strictly by the multi-year tariff order, about 60 per cent of the energy consumed in Nigeria is subsidised by the government. Only Band A pays the reflective tariff,” he said, before adding a layer of complexity: “Even then, we have Band A feeders recording up to 80 per cent energy losses due to theft and bypasses, making full recovery impossible.”
Abubakar explained that because the DisCos cannot recover their full revenue requirements, they are effectively prevented from securing the loans and major investments necessary to upgrade their networks. The delay in subsidy payments, he warned, creates a ripple effect, affecting the entire value chain, particularly the ability of generating companies (Gencos) to pay for gas, thereby crippling overall power production.
“The subsidy is not forthcoming as and when due. It comes whenever the government decides to pay. That is the reality, and it affects everyone,” he concluded. “We cannot pay our market invoices fully, the Gencos cannot fulfil firm contracts with gas suppliers, and the whole chain is weakened.”
