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Efficiency Performance of Electricity Distribution Companies in Nigeria

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  • Olanrele, Iyabo

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.

Suggested Citation

  • Olanrele, Iyabo, 2024. "Efficiency Performance of Electricity Distribution Companies in Nigeria," African Journal of Economic Review, African Journal of Economic Review, vol. 7(2), March.
    • Handle: RePEc:ags:afjecr:344145
    DOI: 10.22004/ag.econ.344145
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    1. Md Kamrul Hossain & Anton Abdulbasah Kamil & Md Azizul Baten & Adli Mustafa, 2012. "Stochastic Frontier Approach and Data Envelopment Analysis to Total Factor Productivity and Efficiency Measurement of Bangladeshi Rice," PLOS ONE, Public Library of Science, vol. 7(10), pages 1-9, October.
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