By Gideon Osaka
In Nigeria’s troubled electricity landscape, where blackouts remain routine and tariffs keep rising, a salient crisis festers in the shadows—energy theft. While consumers decry poor power supply and distribution companies (DisCos) struggle to stay afloat under mounting losses, billions of naira worth of electricity is siphoned monthly through illegal connections, meter bypassing, and other illicit practices. This systemic theft, often treated casually in neighbourhoods across the country, is no longer just a technical issue—it has become a cultural and economic epidemic threatening the survival of Nigeria’s electricity supply industry (NESI).
This article investigates the magnitude, methods, and consequences of energy theft in Nigeria. It highlights the enormous toll it takes on the power sector, draining over N100 billion annually, and exposing a major obstacle to grid improvement and service reliability. It explores how widespread and organised theft practices cripple DisCos’ finances, discourage investor interest, and deepen public distrust in the system. The piece also examines regulatory and legal efforts—including the Electricity Act 2023 and NERC’s new anti-tampering fines—as well as how DisCos are fighting back with smart technologies, community sensitisation, and federal enforcement partnerships. Most critically, the article probes the cultural attitudes and weak enforcement that enable this scourge and outlines why ending energy theft is essential to Nigeria’s path toward reliable electricity and long-term economic development.
Billions of naira worth of electricity is consumed every month across Nigeria without payment. Yet, amid rising tariffs, constant cries over poor supply, and mounting debt within the Nigerian Electricity Supply Industry (NESI), a silent epidemic festers—energy theft. Energy theft is not a new issue, but the prevalence in Nigeria is increasingly startling.
Valuechain reports that approximately 40 per cent of the country’s electricity is stolen or squandered in the system. From illegal connections and meter bypasses to load diversion and direct hooking, energy theft has become one of the most corrosive forces in the power sector. This silent but widespread criminal activity costs the industry over N100 billion annually, undermining investments, discouraging service improvements, and perpetuating the cycle of poor supply.
Energy theft has now more than ever before, become both a technical and cultural crisis, crippling Distribution Companies (DisCos), deepening sector losses, and frustrating genuine reform efforts.
Methods of theft
Energy theft refers to any unauthorised consumption of electricity, often involving the manipulation or circumvention of metering and billing systems. In Nigeria, the most common methods include illegal connections, which involve directly tapping into power lines without official authorisation; meter bypassing, which entails tampering with prepaid meters to reduce or erase consumption readings; load diversion, which is the deliberate under-declaration of energy usage, especially by commercial and industrial users; and lastly, hooking, which connects appliances directly to the grid, bypassing both meters and circuit protection.
These acts of theft are prevalent, particularly in densely populated cities and neglected rural areas. The magnitude of this theft drains billions of naira from the power sector each year, exacerbating existing financial and operational challenges.
Energy theft is often well-organised, especially in densely populated areas and commercial districts. Electricians offer illegal connections as a service. Prepaid meters are tampered with by simply reversing wires or planting magnetic interference devices to slow or stop meter readings.
For instance, in Lagos’ Mushin district, field officers from a major DisCo discovered entire rows of shops connected illegally to streetlight cables. In some residential estates in Ibadan and Ilorin, landlords orchestrate meter bypass for multiple tenants, collecting fixed rent without paying for power consumed.
“Hooking is the most dangerous form,” said a safety officer at Abuja Electricity Distribution Company (AEDC). “People connect directly to high-tension wires, which not only endangers their lives but also causes network imbalance and damages transformers.”
The data behind the theft
Energy theft in Nigeria is rampant, cutting across cities and rural communities. Industry data from the Nigerian Electricity Regulatory Commission (NERC) shows that DisCos lose nearly 30–40% of their energy input to commercial losses, of which theft is a major contributor. Energy theft is not just anecdotal—it is a quantifiable threat. According to the Association of Nigerian Electricity Distributors (ANED), over N105 billion was lost to energy theft and non-payment in 2023 alone. The most affected regions include Southwest Nigeria, parts of the North Central, and urban slums in Lagos and Port Harcourt.
In an energy audit conducted by Ibadan Electricity Distribution Company (IBEDC), it was found that: “In Osun State, more than 54% of our metered customers were involved in meter bypassing or underpayment,” says an IBEDC official who requested anonymity.
This statistic is not isolated. A similar pattern is reported by Ikeja Electric, where illegal connections and meter bypass were responsible for over N8 billion in energy losses in 2023 alone.
According to ANED, DisCos lose over N100 billion annually to theft and non-payment. This haemorrhage contributes to liquidity shortfalls, affecting their ability to upgrade infrastructure or improve service.
“This is why we can’t invest in new transformers or smart meters,” explains a manager at Ikeja Electric. “People expect 24/7 power, but they don’t want to pay for it.”
The DisCos dilemma
Electricity distribution companies walk a tightrope between aggressive enforcement and customer retention. “We send out anti-theft taskforces regularly,” says one of the DisCo officials who pleaded anonymity, “but whenever we disconnect violators, there’s always community backlash.”
DISCOs often find their offices attacked or their staff assaulted during disconnection drives. “We’ve had to involve the police multiple times,” the official adds. “It’s become a security issue.”
The newly passed Electricity Act 2023, which intends to combat electricity theft by imposing harsher penalties, demonstrates the federal government’s acknowledgement of this problem. The Act 2023 (EA) prescribe more punishments for Nigerians who steal power, illegally connect electricity, tamper with metering devices, or embark on destruction of facilities belonging to operators in the value chain. The new law, which replaced the Electricity Power Reform Act (2005), prescribes a conviction of a fine not less than three times the amount calculated for the infraction or at least three years’ imprisonment or both.
In February 2025, the sector regulator, NERC, released a revised order concerning unauthorised access, meter tampering, and bypass, indicating new fines between N100,000 and N300,000, the intent of the Order being to curb theft-unauthorised electricity access, meter tampering, and bypass incidents.
However, without strong enforcement and coordination from all parties, DisCos’ revenue assurance remains jeopardised. While electricity theft is a criminal offence, enforcement is inconsistent. “Prosecuting electricity theft is tough,” says a Police Inspector in Osogbo. “We arrest offenders, but community leaders often intervene. The cases rarely go far.”
Energy expert Mr. Olabode Sowunmi says, “Once we understand that energy theft is anti-social and criminal, it will reduce. We must learn to hold people accountable- the criminals, the people responsible in the power sector.
“There needs to be scapegoats in energy theft, just like Bobrisky was used as a scapegoat to curb naira mutilation.”
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.
Path Forward: Technology and Sensitisation
Some DISCOs have turned to technology to tackle the menace. Smart meters with tamper alarms, feeder monitoring systems, and remote disconnection features are being deployed.
“Technology is key,” says Tayo Aina, an energy analyst. “But it must be matched with community engagement. Many people steal power not just out of greed but frustration and ignorance.”
Public awareness campaigns, stakeholder dialogues, and judicial support are essential if the war on energy theft is to be won.
A few Discos have emerged with inventive ideas to tackle energy theft. For instance, Eko Electricity Distribution Company (EKEDC), which covers Lagos and its surroundings, has, in recent years, 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.
EKEDC’s initiatives extend beyond public education. The company 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.
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.
On its part, IBEDC is collaborating with the federal government through the Special Investigation and Prosecution Task Force on Electricity Offences (SIPETO), a federal government agency dedicated to expediting the investigation and prosecution of electricity offenders within IBEDC’s franchise. Offenders are now being prosecuted under the full weight of the law, signalling a strong deterrent against future infractions. Alongside enforcement, IBEDC is running extensive community awareness campaigns to educate customers on the financial and legal consequences of energy theft.
Simultaneously, it is investing in smart metering solutions and Advanced Metering Infrastructure (AMI), enabling real-time monitoring, leak detection, and remote disconnection—critical tools for loss prevention and improved efficiency.
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 have set strategies to address this issue head-on, but more comprehensive sector reforms, technical upgrades, and legal enforcement will be required. 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.
Energy theft is not a victimless crime. It punishes paying customers with poor supply, discourages investor confidence, and keeps the power sector trapped in a cycle of debt and inefficiency.
Until Nigerians see electricity as a service—not an entitlement—and are held accountable for theft, the dream of stable, reliable power will remain dim.