When DisCos owe Nigerians

FOR once, the ledger in Nigeria’s electricity sector points in the opposite direction. Instead of the familiar refrain that Nigerians owe the power companies, the Nigerian Electricity Regulatory Commission (NERC) has revealed that electricity distribution companies (DisCos) owe Nigerians ₦20.33 billion under the Meter Asset Provider (MAP) scheme. This announcement matters because it publicly acknowledges a rare reality in Nigeria’s electricity market: debt does not flow only from consumers to utilities. In this instance, the utilities themselves owe the Nigerian people. The development further reveals deeper structural weaknesses within Nigeria’s electricity system.

Nigeria’s electricity sector has passed through several institutional phases. The system evolved from the Nigerian Electricity Supply Corporation (NESCO) established in 1929 to the Electricity Corporation of Nigeria (ECN) in 1951, and later the National Electric Power Authority (NEPA) in 1972. Persistent operational inefficiencies eventually led to the restructuring of NEPA into the Power Holding Company of Nigeria (PHCN) in the early 2000s. The last reform came with the Electric Power Sector Reform Act of 2005, which unbundled the sector into generation, transmission and distribution companies in preparation for privatisation. In 2013, the Federal Government sold 11 electricity distribution companies to private investors with the expectation that private capital and improved management would modernise the sector. More than a decade later, however, the results have been mixed. Electricity supply remains erratic, estimated billing persists in many areas, and infrastructure investment has lagged behind expectations. The distribution segment, the interface between electricity providers and consumers, remains the most controversial component of the reform.

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One of the most persistent problems in the sector has been the metering gap. Millions of Nigerian electricity consumers still lack prepaid meters and therefore receive estimated bills, often contested by households and businesses. To address this problem, the regulator introduced the Meter Asset Provider (MAP) scheme in 2018. The policy allowed customers to pay upfront for prepaid meters supplied by licensed third-party providers. The expectation was that DisCos would reimburse these customers gradually through energy credits applied to their electricity bills. In effect, consumers temporarily financed infrastructure that the distribution companies themselves were expected to provide. What NERC has now disclosed is that many DisCos failed to meet their reimbursement obligations. As of December 31, 2025, the outstanding amount owed to customers stood at ₦20.33 billion.

In response, the regulator has directed DisCos to repay the money through electricity credits to affected customers over a 12-month period beginning from March 2026. This decision marks an important departure from the usual narrative in Nigeria’s electricity discourse. For years, the dominant conversation has centred on what Nigerians owe the power companies. Yet the MAP refund case reminds the country of an equally important truth: accountability in a functioning electricity market must run both ways.

Indeed, the MAP issue reflects a broader pattern within the distribution segment of the electricity sector. In many communities across Nigeria, residents have contributed funds to purchase transformers, install poles or upgrade distribution infrastructure simply to obtain electricity service. In numerous cases, these facilities later become integrated into the DisCos’ networks without formal reimbursement. Such arrangements reflect the deep imbalance between monopoly electricity distributors and consumers who have little choice but to accept the prevailing conditions. The ₦20 billion refund directive therefore raises a practical question: how will Nigerians tangibly recover the money owed to them?

The regulator’s plan to implement refunds through energy credits on electricity bills is reasonable. However, for the policy to succeed, NERC must ensure strict enforcement. Consumers must clearly see the credits applied to their electricity accounts, while the regulator should publish periodic compliance reports showing how each Disco is implementing the refund directive. NERC, for its part, must monitor compliance across all 11 DisCos and publish periodic reports showing repayment progress. Without transparent monitoring and enforcement, the directive risks becoming another well-intentioned regulatory order that delivers little practical relief to consumers.

Beyond the immediate refund issue, the episode offers an opportunity to reflect on the broader challenges within Nigeria’s electricity system. Privatisation was expected to attract investment, improve efficiency and eliminate practices such as estimated billing. While progress has been recorded in some areas, the sector still struggles with infrastructure deficits, regulatory disputes and persistent supply instability. The electricity value chain itself remains entangled in a complex web of obligations—between generation companies, distribution companies, bulk power traders and government support mechanisms through the transmission company. Within this system, consumers often bear the greatest burden. The MAP reimbursement directive therefore carries significance beyond the ₦20 billion involved. It signals that the regulator is prepared, at least in this instance, to assert the interests of electricity consumers.

That principle is essential if public confidence in the sector is to improve. Nigerians have endured decades of unreliable power supply while paying increasing tariffs and investing privately in generators, solar systems and other alternatives. If the electricity market is to command legitimacy, it must demonstrate that obligations apply equally to all participants, including the distribution companies themselves. For once, the system has acknowledged that electricity consumers are not merely debtors in the power chain; they can also be creditors. The real test now is whether this recognition will be followed by consistent enforcement. If the regulator can compel DisCos to repay ₦20.33 billion to consumers, it will have demonstrated something more important: accountability in Nigeria’s electricity market can run in both directions.