by Pelumi Peter Aluko-Olokun & Adebayo Adeyinka Victor
https://www.digital.zenithbank.com/ZEQ/ZEQ-jan-2026/index.html#p=1Electricity remains essential for modern economies, powering industries, small businesses, and daily activities. However, in Nigeria, it often fails. Even after over ten years since unbundling the Power Holding Company of Nigeria (PHCN) and privatising the distribution sector, millions of Nigerians face unreliable supply, high bills, and growing frustration. The issue now is not whether reform is necessary but how urgently Distribution Companies (DisCos) can reinvent themselves to fulfil public expectations and support a growing economy. The trust gap between DisCos and consumers is clear, worsened by estimated billing without proper metering, poor fault management, and high technical and commercial losses. These problems reduce revenue, hinder infrastructure investments, and sustain a cycle of underperformance.
The Electricity Act 2023 creates new opportunities, empowering states to develop their electricity markets and fostering innovation in service provision. To take advantage of this, DisCos must focus on a people-oriented strategy—install meters for every customer, upgrade infrastructure, ensure transparent communication, and partner with private sector innovators. Experiences from Ghana, Kenya, and South Africa demonstrate that metering reforms, mobile payments, and decentralised service models can significantly boost performance. For Nigeria, electricity reform is an ongoing process, requiring continuous effort towards reliability, accountability, and innovation. Only through determined actions can DisCos shift from symbols of frustration to catalysts for economic growth and public confidence.
The Trust Deficit
For many households and businesses, DisCos symbolise frustration rather than progress. Ongoing problems—such as estimated billing without proper meters, slow fault response, and technical and commercial losses—have steadily damaged public trust. For example, a household in Lagos might receive a ₦35,000 bill in a month despite having no meter and experiencing daily blackouts. In Port Harcourt, shop owners often wait weeks for transformer repairs, forcing them to use costly diesel generators. In Kano, many customers pay for more power than they use due to inflated load estimates. These issues are more than just inconveniences; they have significant economic impacts. Small businesses, from cold-storage operators to welding shops, struggle to stay profitable amid high tariffs and unreliable power. Consequently, many rely on self-generation, which the World Bank estimates costs Nigerian businesses about $29 billion annually through lost productivity and expensive alternative power.
This trust gap is not just a perception issue; it is a real obstacle to investment and recovering costs in the power sector. Without public confidence, revenue collection declines, and when customers feel deceived, some turn to illegal connections or refuse to pay altogether. Without enough revenue, DisCos cannot maintain infrastructure upgrades, invest in modern technology, or extend service coverage, thus sustaining the very inefficiencies that increase public dissatisfaction. Rebuilding this trust is therefore essential, as it is the foundation on which any meaningful electricity reform must be built.
Reform and Opportunity
The Electricity Act 2023 offers a chance for renewal by enabling states to develop their electricity markets, promoting local solutions and fostering competition. Yet, policy changes alone won’t close the gap between DisCos and consumers; concrete, measurable steps are essential to achieve real progress.
Five Pathways to Regaining Public Trust
- Meter Every Customer
The fastest way to rebuild confidence is to eliminate estimated billing. Large-scale deployment of prepaid and smart meters will allow customers to pay only for what they use, improve consumption tracking, and curb energy theft.
- Invest in Infrastructure to Reduce Losses
Nigeria’s Aggregate Technical, Commercial & Collection (ATC&C) losses, estimated at over 40% in some regions, are unsustainable. Replacing obsolete transformers, upgrading distribution lines, and deploying fault-detection technology will improve efficiency and service reliability.
- Improve Transparency and Customer Engagement
DisCos must communicate planned outages, tariff changes, and service timelines. Mobile apps and dedicated customer portals can allow users to report faults, track response times, and receive feedback, all of which build trust.
- Partner with the Private Sector for Innovation
DisCos cannot solve the problem alone. Partnerships with technology firms, renewable energy developers, and microgrid operators can extend coverage to underserved areas, especially in rural and peri-urban communities.
- Strengthen Regulatory Compliance and Accountability
The Nigerian Electricity Regulatory Commission (NERC) must enforce performance benchmarks with real consequences for underperformance. Public scorecards and performance audits can drive healthy competition among DisCos.
Learning from Other Countries
Ghana’s Energy Commission has drastically improved metering coverage, while Kenya’s utility companies have leveraged mobile money for bill payments and fault reporting. South Africa’s municipal distribution models have demonstrated the value of localising service delivery. Nigeria can adapt these lessons to suit its diverse and complex market.
The Role of Consumers
Consumers also have a role to play in reporting illegal connections, paying for power consumed, and participating in community monitoring schemes. Public cooperation is vital to breaking the cycle of losses and poor service.
A Call to Action
Electricity reform is an ongoing process, not a single event, requiring continuous adjustments to infrastructure, regulation, and customer service to match economic realities. The future of the DisCos and the country’s economy hinges on their capacity to provide affordable, reliable, and transparent electricity. Restoring public trust will take time, but through targeted investment, innovation, and accountability, DisCos can revive not only power in homes and factories but also confidence among the millions they serve.
