By Stella Odueme
Nigeria maintained one of the lowest electricity tariff regimes in Africa in 2025, with consumers paying significantly less for power than customers in most African countries, even as the Federal Government’s electricity subsidy obligation rose to N1.928 trillion.
The figures are contained in the 2025 Annual Report and Accounts released by the Nigerian Electricity Regulatory Commission (NERC).
According to the report, the average allowed electricity tariff for end-use customers in Nigeria stood at $0.08 per kilowatt-hour (kWh), equivalent to about N124.30/kWh, compared with an average of $0.19/kWh across selected African comparator countries.
The Nigerian tariff represented about 42.11 per cent of the regional benchmark, highlighting the extent to which electricity prices in the country remain below market-reflective levels.
South Africa recorded the highest average electricity tariff among the countries surveyed at $0.27/kWh, followed by Sierra Leone at $0.25/kWh and Mali at $0.23/kWh.
Burkina Faso, Kenya, Gabon and Togo each recorded tariffs of $0.22/kWh, while Senegal charged $0.19/kWh. Ghana and Rwanda recorded $0.18/kWh each, Uganda charged $0.16/kWh, Namibia $0.15/kWh and Ivory Coast $0.14/kWh.
Mauritius had the second-lowest tariff at $0.13/kWh, although this was still significantly higher than Nigeria’s $0.08/kWh.
NERC explained that the N1.928 trillion subsidy obligation represents the difference between the cost-reflective tariff required to sustain electricity supply and the tariff approved for customers.
The Commission said the Federal Government is expected to cover the resulting shortfall whenever approved tariffs fall below the market-reflective cost of electricity.
Beyond tariffs and subsidies, the report revealed persistent operational and financial challenges across Nigeria’s electricity supply industry.
Average available generation capacity from grid-connected power plants stood at 5,398.33 megawatts (MW) during the year. However, the availability factor was only 39.62 per cent, indicating that more than 60 per cent of installed generation capacity remained unavailable.
Total electricity generation for the year stood at 39,208.68 gigawatt-hours (GWh), with hydropower accounting for 12,804.18GWh, representing 32.66 per cent of total generation.
The report also showed that Nigeria's metering gap remained substantial.
As of December 31, 2025, only 6,966,584 out of 12,163,412 registered electricity customers had been metered, representing a metering rate of 57.27 per cent.
Although Distribution Companies installed 972,040 new meters during the year through various metering programmes and financing schemes, more than 5.1 million customers remained without meters.
On energy accounting, the 11 Distribution Companies received 31,251.77GWh at their trading points but billed customers for 25,867.86GWh, representing an energy accounting efficiency of 82.77 per cent.
Ibadan Electricity Distribution Company recorded the highest energy accounting efficiency at 88.84 per cent, while Enugu Electricity Distribution Company posted the lowest at 72.18 per cent.
In financial terms, the DisCos billed N2.988 trillion out of the N3.683 trillion worth of electricity supplied during the year, translating to a gross billing efficiency of 81.14 per cent.
However, collections stood at N2.319 trillion, representing a collection efficiency of 77.60 per cent.
The report further showed that the combined Aggregate Technical, Commercial and Collection (ATC&C) losses across the Distribution Companies reached 37.03 per cent, significantly above the 20.54 per cent regulatory target for 2025.
The high losses continue to pose a major challenge to the financial sustainability of the Nigerian Electricity Supply Industry.
On market remittances, the DisCos paid a combined N1.632 trillion to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator against an invoice of N1.722 trillion.
This represented a remittance performance of 94.80 per cent, leaving a market shortfall of N89.58 billion.
Eko, Ikeja and Port Harcourt Electricity Distribution Companies achieved 100 per cent remittance to NBET.
Kaduna Electricity Distribution Company, however, recorded the lowest performance, remitting only 40.13 per cent to NBET.
Kaduna DisCo also posted the lowest remittance to the Market Operator at 48.11 per cent.
The NERC report underscores the continuing challenges confronting Nigeria’s electricity sector, particularly the growing burden of subsidies, inadequate generation availability, widespread metering gaps, high distribution losses and weaknesses in revenue collection.
Despite these challenges, the data confirms that Nigerian electricity consumers continue to enjoy some of the cheapest electricity tariffs on the African continent, with the government absorbing a significant portion of the actual cost of supplying power.