“Let the DISCOs Die for Nigerians to Have Light”

The Unending Darkness: How Nigeria’s DISCOs Have Failed and Why Urgent Reform is Needed

Nigeria’s electricity crisis has persisted for decades, frustrating millions of citizens and crippling economic growth. The nation’s power sector reform, which was supposed to bring relief, has instead deepened the woes of consumers who continue to experience widespread blackouts, estimated billing, and unreliable service.

The root of this crisis can be traced back to the privatization of the electricity distribution companies (DISCOs) in 2013, when the Nigerian government sold majority stakes in these companies to private investors. The goal was to improve efficiency and ensure a steady power supply, but 12 years later, the situation has deteriorated further. The DISCOs have failed to meet their mandate, burdening Nigerians with high tariffs, poor service delivery, and outright fraud.

With power shortages worsening and businesses struggling to survive under an unreliable energy supply, many Nigerians are left wondering: Was privatization a mistake? Should the government reclaim control, or should the DISCOs be replaced by more competent investors?

The Failure of Nigeria’s Electricity Reforms

The privatization of the power sector was part of the Electric Power Sector Reform Act (EPSRA) of 2005, which aimed to break up the former Power Holding Company of Nigeria (PHCN) into smaller entities responsible for power generation, transmission, and distribution. Under this model:

• Generation companies (GENCOs) produce electricity.
• The Transmission Company of Nigeria (TCN) manages the national grid.
• Distribution companies (DISCOs) deliver power to homes and businesses.

The DISCOs were expected to modernize the power infrastructure, install prepaid meters, reduce estimated billing, and ensure reliable service. However, these promises have not materialized, leading to widespread frustration.

Major Failures of the DISCOs

1. Lack of Technical Competence and Poor Infrastructure

Many of the investors who took over the DISCOs lacked experience in the power sector. Instead of investing in modern infrastructure, they relied on outdated and inefficient systems, inherited from the PHCN era. Today, Nigeria’s power distribution network is plagued by:

• Aged transformers that frequently break down
• Dilapidated power lines that cause outages
• Inadequate substation capacity leading to load shedding

The DISCOs have repeatedly blamed their failures on obsolete equipment, yet they have done little to replace these assets, despite collecting billions from consumers.

2. The Exploitation of Consumers Through Estimated Billing

Rather than providing fair and accurate billing through prepaid meters, the DISCOs have continued the corrupt practice of estimated billing, which forces customers to pay inflated amounts for power they do not use. Despite government regulations mandating prepaid meters, many consumers still struggle to obtain them, as DISCOs deliberately frustrate the process to keep profiting from estimated billing.

• In many cases, customers are charged over ₦30,000 per month for electricity they barely receive.
• Even areas that experience constant blackouts are still billed for power that was never supplied.

This fraudulent billing system has fueled widespread resentment, with many communities resorting to protests and legal action against the DISCOs.

3. Forcing Consumers to Pay for Repairs and Infrastructure

One of the biggest scandals in Nigeria’s power sector is the illegal practice of forcing customers to pay for faulty equipment. Across the country, residents and businesses are made to contribute money to:

• Buy new transformers when existing ones break down.
• Repair power lines and poles that should be the responsibility of the DISCOs.
• Pay engineers to fix faults in their neighborhoods.

Despite these contributions, ownership of these assets reverts to the DISCOs, and customers receive no compensation or billing waivers.

4. The Deception of Service Bands and High Tariffs

In an attempt to justify outrageous tariff hikes, the DISCOs introduced a band system, classifying customers into different service categories:

• Band A: Supposed to receive 20 hours of electricity daily (paying up to ₦207 per kilowatt-hour).
• Band B: Promised 16 hours daily.
• Band C: Expected to get 12 hours daily.
• Band D: Promised 8 hours daily.
• Band E: Receives the lowest supply (4 hours or less per day).

However, in reality, many customers in Band A barely receive 10 hours of power daily, while those in lower bands suffer from prolonged blackouts that last days or even weeks. The band classification appears to be a deceptive strategy to increase tariffs while failing to deliver the promised electricity supply.

The Role of NERC: A Regulator That Has Failed Nigerians

The Nigerian Electricity Regulatory Commission (NERC) is supposed to hold the DISCOs accountable, but its failure to enforce regulations has enabled widespread abuse in the sector. NERC’s Key Performance Indicators (KPIs), which include:

• Customer service satisfaction
• Billing transparency
• Service quality
• Complaint resolution

… are consistently ignored by the DISCOs, with no serious penalties or consequences.

Although NERC has imposed some fines on erring DISCOs, these penalties are insignificant compared to the billions they collect through estimated billing and illegal charges.

How the Electricity Crisis Affects Nigeria’s Economy

The failure of the DISCOs is not just a problem for individual consumers—it is a major obstacle to national economic growth. With an unreliable power supply:

• Businesses are forced to rely on expensive generators, increasing the cost of production and reducing competitiveness.
• Manufacturing output remains low, as factories struggle with power disruptions.
• Unemployment rates rise, as industries fail to expand due to high operational costs.
• Foreign investment is discouraged, as investors avoid a country with an unstable energy sector.

The Way Forward: What Must Be Done

To rescue Nigeria from perpetual darkness, urgent steps must be taken to reform the power sector:

1. Dissolve the DISCOs and Replace Them With Competent Investors

   • The government must revoke licenses of non-performing DISCOs.
   • New investors with technical expertise and financial capacity should take over.

2. Enforce Strict Regulatory Oversight

   • NERC must impose heavy fines for service failures.
   • DISCOs that fail to meet their KPIs should face license revocation.

3. End Estimated Billing and Provide Prepaid Meters for All

   • A nationwide prepaid metering rollout should be made mandatory.
   • Consumers must only pay for electricity they actually use.

4. Invest in Infrastructure Modernization

   • Nigeria must replace aging transformers and expand grid capacity.
   • The government should encourage renewable energy solutions to ease pressure on the grid.

5. Promote Off-Grid Solutions

   • Solar power, mini-grids, and independent power producers (IPPs) should be encouraged.
   • Households and businesses should have the right to disconnect from the DISCOs if they provide unreliable service.

 Let the DISCOs Die for Nigeria to Have Light

For 12 years, Nigeria’s DISCOs have held the country hostage, using fraud, incompetence, and regulatory failures to exploit consumers. Enough is enough.

If Nigeria is serious about development, it must scrap the current DISCO system and bring in new, competent investors who can deliver electricity reliably and affordably. Until that happens, Nigerians will remain trapped in darkness, while businesses suffer, and the economy stagnates.

The time for action is now.