Efficiency Performance of Electricity Distribution Companies in Nigeria

Abstract

This paper examines the technical efficiency of electricity supply across 11 electricity distribution companies using the Data Envelopment Analysis (DEA). The analysis was performed with a recent and extended data from 2015 to 2022. The output indicator for calculating electricity supply efficiency is electricity supply proxy by energy received by each electricity distribution company. The input indicators are network losses (proxy by transmission losses) and aggregate technical commercial and collection losses (ATC&C). The results show that all electricity distribution utilities are technically inefficient in electricity supply to a varying degree. Four electricity distribution companies performed above 45 percent level of technical efficiency, while two operate at less than 80 percent. Also, the efficiency performance of the 11 distribution companies worsened since the beginning of the COVID-19 pandemic era.  Thus, privatization has not eradicated technical inefficiencies in the electricity supply. The inefficiencies in the electricity distribution sub-sector are partly due to technical constraints from network losses.