At a time when Nigeria is working to relaunch its economy, particularly in the face of continuous challenges, the country’s electricity industry is at a crossroads. Energy theft now widespread and persistent has become a serious challenge, not just to energy distribution companies (Discos), but also to the larger goal of national recovery and self-reliance.
The newly passed Electricity Act 2023, which intends to combat electricity theft by imposing harsher penalties, demonstrates the federal government’s acknowledgment of this problem. However, without strong enforcement and coordination from all parties, including innovative attempts from forward-thinking Discos, Nigeria’s economic future remains jeopardised.
Energy theft is not a new issue, but the prevalence in Nigeria is startling. Approximately 40 per cent of the country’s electricity is stolen or squandered in the system. Illegal connections, meter manipulation, and infrastructure sabotage are common, especially in densely populated cities and neglected rural areas. The sheer scope of this theft takes billions of naira from the power sector each year, worsening existing financial and operational issues.
For many discos, this truth is crushing. With billions in losses, many businesses struggle to maintain existing infrastructure, let alone grow or improve their networks. As a result, their operational capacities are limited, and their financial survival is constantly jeopardised. This generates a vicious loop in which dissatisfied customers, annoyed by inconsistent power supplies, justify illicit connections, exacerbating the sector’s income shortfalls.
However, the implications extend beyond the electrical sector. Energy theft substantially impacts overall economic growth. Without reliable electricity, firms, particularly those in manufacturing and heavy industries, are forced to rely on costly, inefficient generators. This boosts production costs, lowers competitiveness, and slows job development. Investor confidence, a key indicator in Nigeria’s economic recovery, has also been damaged, as the recurrence of energy theft reveals governance inefficiencies that are impossible to ignore.
While energy theft is an industry-wide issue, the financial and operational impact differs by Disco. Many people, especially those who work in high-density, low-income areas, are devastated financially. Electricity theft can result in billions of dollars in losses each year, impeding much-needed infrastructure investments that would otherwise support growth and reliability. These discos are in a hazardous condition, trying to break free from the cycle of low income and bad service performance.
Despite the pessimism, a few Discos have emerged with inventive ideas. These forward-thinking enterprises have become the cornerstone in protecting the federal government’s electricity regulations by taking bold, proactive steps to combat the threat of energy theft. The Eko Electricity Distribution Company (EKEDC), which covers Lagos and its surroundings, stands out as a pioneer in this area.
EKEDC’s multifaceted strategy to combating energy theft demonstrates what can be accomplished when resolve meets creativity. In recent years, EKEDC has developed a comprehensive anti-energy theft campaign to educate the public on the economic, operational, and legal ramifications of power theft. This effort, which focuses on customers, local communities, and companies, has had a noticeable impact by raising awareness of how unlawful drinking harms everyone.
Mrs. Rekhiat Momoh, EKEDC’s Acting CEO, stated that “energy theft is a menace that we must remove in our network and the power sector. Our industry loses potential billions in revenue each year as a result, and it limits industry-wide capacity to invest in network expansion and infrastructure modifications necessary to provide the desired reliable power supply accross the country.”
But EKEDC’s initiatives extend beyond public education. The corporation has taken substantial steps to assist with law enforcement, including increasing efforts to monitor communities known for electricity theft. This collaboration has resulted in multiple arrests and prosecutions, sending a strong message to criminals about the consequences of their conduct. Furthermore, EKEDC has expanded its collaboration with local community leaders and vigilante organisations, teaching them to aid in identifying perpetrators and broadening the scope of monitoring.
In addition to public awareness campaigns and law enforcement cooperation, EKEDC has made significant investments in technology as part of its strategy to reduce energy theft losses. The company’s use of smart meters, which are tough to circumvent, has been a game changer. These meters not only give exact billing to clients, solving the long-standing issue of estimated billing, but also enable EKEDC to remotely monitor consumption patterns and spot inconsistencies in real time.
This change to smarter infrastructure is a huge step forward for EKEDC and the electricity sector as a whole. The adoption of smart meters helps to restore public trust in the billing system, which has long been a source of dissatisfaction for many Nigerians. By providing customers with correct information, EKEDC is establishing the groundwork for a more dependable and transparent power supply network.
The Electricity Act 2023: A step in the right direction
While EKEDC’s initiatives serve as a model for others to follow, the federal government has acknowledged the need for stronger legislative frameworks to discourage energy theft. The Electricity Act of 2023 imposes harsher punishments, including fines of up to six times the value of stolen electricity and prison sentences of up to three years. These restrictions are designed to serve as a deterrence, delivering a clear message that energy theft will not be condoned.
However, for the law to be successful, persistent enforcement is required. The challenge will be to successfully apply the rule in rural areas and heavily populated urban slums, where illegal connections are most prevalent. Without appropriate enforcement, the new legislation may fail to have the intended effects.
Despite these efforts, one of the most significant obstacles is societal attitudes regarding electricity theft. Many Nigerians regard electricity as a fundamental entitlement and fail to realise the far-reaching economic ramifications of stealing power. As Mr. Olabode Sowunmi, Chairman of the Hydrogen and New Energy Committee, points out, “When people steal power, they deprive us of our commonwealth. We must learn to hold people accountable, including criminals and those in authority.
Moving forward, further public education, together with continued investments in smart infrastructure and stringent implementation of the Electricity Act 2023, will be vital. DisCos such as EKEDC have demonstrated that development is feasible, but structural reform throughout the industry is required for long-term success.
Nigeria is at a crossroads in its economic recovery, and the stakes have never been higher. The power sector, long beset by inefficiency, cannot afford to allow energy theft to continue unabated. DisCos such as EKEDC have set a good example by addressing this issue hard on, but more comprehensive sector reforms, technical upgrades, and legal enforcement will be required to safeguard Nigeria’s economic future. Preventing energy theft is about more than just restoring the electricity grid; it’s about maximising the country’s potential for prosperity and self-sufficiency.
Obinna, Energy Expert, lives in Abuja.
