Nigeria’s electricity sector recorded a revenue shortfall of about ₦1.36 trillion in 2025, highlighting one of the biggest financial challenges facing the country’s power industry.

According to the Nigerian Electricity Regulatory Commission’s (NERC) 2025 Annual Report, the country’s 11 electricity distribution companies supplied electricity worth about ₦3.68 trillion during the year but billed customers for only ₦2.99 trillion. Of the amount billed, just ₦2.32 trillion was eventually collected.

This left a significant gap between the value of electricity supplied, the amount customers were billed, and what the distribution companies actually collected.

The report shows that approximately ₦694.8 billion worth of electricity was supplied but not billed, while another ₦669.5 billion in billed electricity remained uncollected.

Together, the billing and collection gaps contributed to the sector’s estimated ₦1.36 trillion revenue shortfall in 2025.

The numbers point to a problem that goes beyond how much electricity Nigeria generates. Even when power is supplied to consumers, weaknesses in metering, billing, and revenue collection can prevent electricity from generating enough revenue to sustain the system.

This matters because Nigeria’s electricity sector requires continuous investment in generation, transmission, distribution, and maintenance. When a significant portion of the revenue expected from electricity sales is lost, it becomes more difficult for operators to invest in infrastructure and improve service delivery.

The revenue challenge also reinforces the need for a more efficient electricity market, one where consumers are properly metered and billed, electricity delivered is accurately accounted for, and operators are able to collect what they are owed.

For Nigeria’s power sector to become more reliable, increasing electricity generation alone will not be enough.

The sector also needs to become better at turning the electricity it supplies into the revenue required to keep the system running and growing.