Nigeria’s Electricity Tariffs Remain Africa’s Cheapest As Subsidy Bill Hits N1.9Trn -NERC
By Sunday Etuka
Nigerian electricity consumers paid less for power than their counterparts in nearly every other country surveyed across Africa in 2025, even as the federal government’s subsidy bill to cover the gap between market-reflective costs and what customers were charged climbed to N1.928 trillion, according to the Nigerian Electricity Regulatory Commission’s (NERC) newly released 2025 Annual Report and Accounts.
The average allowed tariff for end-use customers in Nigeria stood at $0.08/kWh (about N124.30/kWh) for the year, a fraction of the $0.19/kWh average recorded across a group of mostly West African comparator countries, and just 42.11% of that regional benchmark.
Among the countries surveyed, South Africa had the highest tariff at $0.27/kWh (N399.73), followed by Sierra Leone at $0.25/kWh (N373.18) and Mali at $0.23/kWh (N342.20). Burkina Faso, Kenya, Gabon and Togo each charged $0.22/kWh, while Ghana billed $0.18/kWh, alongside Rwanda at the same rate. Senegal charged $0.19/kWh, Uganda $0.16/kWh, Namibia $0.15/kWh, Ivory Coast $0.14/kWh, and Mauritius recorded the second-lowest rate at $0.13/kWh, still well above Nigeria’s.
NERC said the subsidy figure reflects what the government owes to cover the shortfall whenever approved customer tariffs fall below the cost-reflective tariff it calculates. That shortfall funding obligation reached N1,928.31 billion for 2025.
The report also flagged deep structural weaknesses in the power sector. Average available generation capacity across grid-connected plants stood at 5,398.33MW, but the availability factor was just 39.62%, meaning over 60% of installed capacity sat idle through the year. Total generation reached 39,208.68GWh, with hydropower supplying 12,804.18GWh, or 32.66% of the total.
On metering, only 6,966,584 of 12,163,412 registered customers (57.27%) had meters as of December 31, 2025, despite DisCos installing 972,040 new meters during the year through various financing schemes.
DisCos billed 25,867.86GWh out of 31,251.77GWh received at their trading points, an energy accounting efficiency of 82.77%, with Ibadan DisCo performing best (88.84%) and Enugu DisCo worst (72.18%).
In naira terms, DisCos billed N2,988.30 billion of the N3,683.10 billion worth of energy supplied, a gross billing efficiency of 81.14%, but collected only N2,318.81 billion, recording a 77.60% collection rate.
The combined Aggregate Technical, Commercial and Collection (ATC&C) loss across all DisCos hit 37.03%, well above the 2025 regulatory target of 20.54%.
On remittances, DisCos paid NBET and the Market Operator a combined N1,632.04 billion against a N1,721.624 billion invoice, a 94.80% remittance rate, leaving an N89.58 billion market shortfall.
Eko, Ikeja and Port Harcourt DisCos hit 100% remittance to NBET, while Kaduna DisCo lagged at 40.13%. Kaduna also recorded the lowest remittance to the Market Operator, at 48.11%.
