Senate urges Federal Government to halt financial bailouts to power distribution companies (Discos)

The Nigerian Senate has called on the Federal Government to cease the disbursement of public funds to electricity distribution companies (Discos), accusing them of mismanagement, inefficiency, and continued exploitation of the Nigerian people despite receiving repeated financial interventions.

During plenary on Thursday, lawmakers voiced their frustration over what they described as an unending cycle of government bailouts to the privately-owned power firms, which were unbundled and handed over to private investors during the 2013 electricity sector privatization. Despite the huge sums already injected into the sector, the Senate lamented that there has been little to no measurable improvement in electricity supply, service delivery, or infrastructure development.

Senator Aminu Tambuwal, who raised the motion, expressed dismay at the federal government’s continued allocation of public funds to companies that are expected to operate under a commercial, profit-driven model. He described the practice as not only unsustainable but also a direct violation of the principles upon which the privatization process was founded.

“We cannot continue to enrich private businesses with taxpayer money without results,” Tambuwal said. “The Discos were created to operate independently, make profits, and reinvest in infrastructure. What we have seen instead is a pattern of incompetence and failure, with the government stepping in again and again to cover for their inefficiencies.”

According to available data, the federal government has disbursed over ₦2 trillion in various forms of intervention funds and support packages to the Discos since their inception, including the ₦213 billion Nigerian Electricity Market Stabilization Facility and several liquidity injections intended to stabilize the power sector.

However, senators argued that power supply remains erratic across the country, with frequent blackouts, poor metering, inflated estimated billing, and aging infrastructure remaining persistent problems. They pointed out that many Discos have failed to upgrade their distribution networks or invest in customer service improvements, even as electricity tariffs continue to rise.

Senate President Godswill Akpabio, who presided over the session, backed the motion and called for a thorough audit of the funds disbursed to the power companies. He noted that the Senate would not support any further appropriation of public funds to failing entities under the guise of sectoral support.

“This Senate will no longer stand by while public funds are diverted to prop up companies that continue to underperform. The Nigerian people deserve value for their money and stable electricity, not excuses,” Akpabio stated.

Other lawmakers echoed similar sentiments, insisting that the Nigerian Electricity Regulatory Commission (NERC) must hold the Discos accountable for their contractual obligations. They also recommended that the Bureau of Public Enterprises (BPE) revisit the privatization agreements to determine whether the companies have fulfilled their commitments regarding investment and service targets.

Senator Uche Ekwunife from Anambra State called for the revocation of licenses of Discos found to be grossly underperforming. “We should not be afraid to revoke and reorganize. If these companies cannot deliver, then let capable hands take over,” she said.

The Senate also urged the federal government to explore alternative models for revamping the power sector, including decentralizing the grid, promoting embedded generation, and encouraging state-level participation in electricity generation and distribution. The lawmakers believe these approaches would reduce overreliance on underperforming national assets and encourage competition and innovation.

In reaction to the Senate’s position, several consumer rights groups have praised the resolution, describing it as long overdue. The All-Nigeria Electricity Consumers Protection Forum said the move signaled a new era of oversight and accountability and called on the executive to implement the Senate’s recommendations without delay.

“We commend the Senate for finally speaking the truth. Nigerians have suffered for too long under a failing power system that benefits a few at the expense of many,” the forum said in a statement.

Meanwhile, industry analysts have pointed out that while cutting off funding to the Discos may be necessary, it must be accompanied by regulatory and structural reforms that address long-standing challenges in the sector, including cost-reflective tariffs, collection inefficiencies, technical losses, and limited generation capacity.

As Nigerians continue to grapple with inadequate electricity despite government spending, the Senate’s latest stance may spark wider debates around the sustainability of the country’s power sector model and the need to restructure it for better efficiency and service delivery.

With the resolution passed and forwarded to the appropriate ministries and agencies, all eyes are now on the Federal Government to see whether it will act on the Senate’s directive and shift from bailouts to reform.