The Nigeria Independent System Operator (NISO) has announced that the federal government has netted off approximately 97 per cent of outstanding market obligations owed by the Nigerian Electricity Distribution Companies (DisCos) for the period 2015 to 2020. According to NISO, the affected DisCos must move swiftly to settle their remaining balances. The disclosure relates to longstanding debts within Nigeria's electricity market, which have been a persistent challenge for the country's power sector and its financial stability.

The Nigeria Independent System Operator (NISO) has directed electricity Distribution Companies (Discos) to settle their outstanding market obligations following a 97 percent debt relief granted by the Federal Government, threatening sanctions against defaulters. The directive comes as the Discos' revenue collection for June fell by 7.82 percent to N191.86 billion, according to ThisDay Live. The development highlights ongoing financial challenges within Nigeria's power sector, where distribution companies have long struggled with liquidity and payment shortfalls to the electricity market.

Nigerian Electricity Distribution Companies (Discos) experienced a loss of over 1.13 million customers in 2025, attributed to unreliable power supply and increasing energy costs, according to Punch.

The Federal Government of Nigeria claims it is addressing the electricity sector's debt, stating it has reached approximately N4 trillion. However, Generation Companies (GENCOs) dispute this figure, asserting that the actual debt is N7 trillion and that no payments have been made. This ongoing disagreement highlights the tensions between the government and GENCOs regarding the financial status of the power sector.

According to Legit.ng, Togo, Benin Republic, and Niger collectively owe Nigeria N17.45 billion in electricity debt. This situation exacerbates the financial challenges faced by these countries, while data indicates that domestic customers in Nigeria tend to pay their electricity bills more reliably.

Nigeria's Federal Government is set to spend N358 billion on electricity subsidies in the first quarter of 2026, even as the country continues to experience persistent blackouts. This expenditure occurs while electricity tariffs remain frozen, according to Punch.