DisCos face imminent collapse, wallow in debt

The postponed fears by most stakeholders in the Nigerian electricity market is nowhere, as the weak structure of electricity companies, especially the 11 distribution firms (DisCos) and government-induced bottlenecks, have pushed the sector to the verge of collapse.

Built on debt, weak corporate governance structure, poor tariff system, weak regulatory enforcement and lack of respect for extant regulations in the payment of electricity bills, especially by states and Federal Government Ministries, Departments and Agencies (MDAs), there are indications that commercial banks and other lenders to the power sector may tighten facility rendering, with the consequence of throwing many into the labour market.

Growing insecurity across the country, especially in the Southeastern region, where sit-at-home orders are being declared weekly and most Northern states faced with insurgency and banditry, as well as the escrowing of electricity market accounts by the Central Bank of Nigeria (CBN) has also compounded the inefficiency of the market.